TMT Conference London, 7 th June 2006
Mediaset 2003-2006, Consistency with our Strategy Focus on the Core Business Profitability Assessing All the Growth Opportunities November 2002 TECHNOLOGICAL DEVELOPMENT GEOGRAFICAL EXPANSION DTT (Pay/Free) DTT Mobile Tv (DVB-H) ADSL Other digital platform Rights Trading PubliEurope Emerging Market (East Europe, Others) Creativity/Content House Core Business Cross Media Ownership Teleshopping DTT switch off date VERTICAL INTEGRATION LEGAL FRAMEWORK Mediaset Group 2
Mediaset From FTA TV to Media Company DVB-H (2006) Core Business One of the Largest TV and media company in Europe Leadership in audience shares both in Italy and Spain Leadership in the TV Adv. market both in Italy and Spain Total Net Revenues: 3,678.0 ml Euro Digital Terrestrial Television (2004) Pay per View (2005) 3
TV PLATFORM Italian Competitive Scenario Mediaset Competitive approach vs. Convergency 2004 2005 2006 DTT PPV DVB-H FTA DTH Cable ADSL Mobile UMTS 4
TV PLATFORM Italian Competitive Scenario Mediaset Competitive approach vs. Convergency 2004 DTT FTA 5
DTT roadmap in Europe and USA Country Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Italy Dic United Kindom Nov itv Digital Jul France May Germany May Spain Oct Quiero TV May Nov Finland Aug Sweden Apr USA Apr DTT Launch/Re-launch Official national switch-off date Sources: DVB; DigiTag; Digital TV Group; Booz Allen Hamilton analysis 6
DTT development in the major European countries 2002 2005 DTT STB penetration (.000) UK Germany Italy Spain France 700 1300 470 120 2400 2300 1300 1000 3500 2500 1000 1800 2900 272 4400 6400 7900 8900 Q4 2002 Q2 2003 Q4 2003 Q2 2004 Q4 2004 Q2 2005 Q4 2005 Sources: Ofcom; GfK; DVB; Digitag; Dataxiz 7
DTT development in Italy 8
9 9 DTT Development in Italy State of the Art 6 national network operators (10 Mux) Over 80 local TV broadcasters 15 free content providers (28 channels) 2 providers of Pay Services + a number of local TV operators 14 interactive channels and over 100 interactive services on air in the last 2 years 2 mobile TV networks (DVB-H) ready to go on air (open to all telecom and mobile content providers) Sources: DGTVi; FUB; Booz Allen Hamilton analysis
DTT Development in Italy Coverage Transmission Technology Operator Number of DTT multiplexes Population Coverage 2 mux 80% - 65% 2 mux >70% DVB-T 2 mux 70% - 65% 1 mux 68% 1 mux 47% DVB-H 1 mux 1 mux n.a. n.a. Source: DGTVi, Corporate website - Local TV MUXs are not included 10
DTT Development in Italy Set-Top-Box Penetration DTT STB penetration 3,600 4,000 1,250 2,100 95% are Interactive STB s 0 340 jan 04 jul 04 jan 04 june 05 jan 06 mar-06 Driver for DTT success Content offering Premium contents (pay per view) Free channels Interactive services Accessibility Plug and Play installation Affordable pay offering Source: GfK Marketing Services Italia STBs Price History 390 Subsidy Net Price 150 Retail Price (gross of Sudsidy) 250 199 179 150 149 119 150 150 99 70 79 239 99 49 29 149 49 99 79 jan 04 mar-04 may 04 sept 04 dec 04 apr-04 nov-05 today 11 11
DTT Development in Italy Channel Offer Main analogue channels in simulcast Sport and sport news i i i i i SPORT i i i SOLOCALCIO News: financial, international, Kids Shopping Music channels i i i Cinema news Public service channels Religion Pay per View services i i i i i i Interactive Channels Note: Rete A multiplex is not included (broadcasting All Music, The Club, Camera, Senato ) because its current coverage is below 50% Sources: DGTVi; Sat-Net; Booz Allen Hamilton analysis 12
TV PLATFORM Italian Competitive Scenario Mediaset Competitive approach vs. Convergency 2004 2005 DTT PPV FTA DTH Cable ADSL 13
Pay-Per-View First Pre-paid card Offer on TV BENEFITS FOR VIEWERS No dish required No Subscription Pay for what you watch Clear and simple technology BENEFITS FOR MEDIASET Focused Investments Defensive Move Driver for DTT Penetration Additional Revenues Credit recharged on the Card 4 1 Credit used watching Mediaset Premium Content Credit sent OTA (Over the Air) to the STB 3 2 Credit Purchased (online / off line) 14 14
Pay-Per-View Mediaset Premium. Coming up! Soccer Theatre and Concerts Movies Reality Games Fiction 15
Pay-per-View Update on Mediaset Premium Take off Phase II 31 st December 2005 IQ 2006 Mediaset Premium Smart Cards Sold to Retailers 1.438.000 470.000 N Recharges sold to Retailers 1.282.000 1.146.000 Cashed in 63.4 ml Euro (*) 22.4 ml Euro (*) 80 ml Euro including trial phase during 1H 2005 Digital Terrestrial TV 16 16 16
TV PLATFORM Italian Competitive Scenario Mediaset Competitive approach vs. Convergency 2004 2005 2006 DTT PPV DVB-H FTA DTH Cable ADSL Mobile UMTS 17
Mobile TV DVB-H Digital Terrestrial Network DVB-T DVB-H Digital Terrestrial Set-Top-Box Mobile Handset, PDA, Portable TV Open Platform Limited Broadcasting Capacity Ideal for FTA Broadcasting Channel multiplication 2 MUX. already hosting 3 rd party channels 4 6 Mbps per channel 4 6 channels per Multiplex Open Platform Tv content can be broadcast in original format and DVD quality Low power consumption for handset Needs only a small antenna 200 500 kbps per channel 20 25 channels per Multiplex 18
Mobile TV DVB-H Value Chain Content Providing Content Edition Commercial DIstribution Broadcast Access (CAS+Billing) Equipment FTA Channels Theme Channels PPV Content Other selected content (i.e. news, best of, etc.) Mobile Handset Manufacturer (partially subsidiared by mobile operators) Open platform Non-exclusive agreements 19
Mobile Tv Mediaset Agreements with Mobile Operators Transmission Network Content - 3 Commercial Channels - SeriesA Championship - Champions League - 3 Commercial Channels - SeriesA Championship - Boing (kids channel) On Air Already covering all big Cities in Italy On Air from 5 th June 2006 20
MEDIASET DTT Business Model 21
Mediaset DTT Business Model Content Provider Network Provider FREE-TO-AIR TELEVISION PAY TV NETWORK OPERATOR Commercial TV 3 generalistic channels funded by advertising (Analog, DVB-T, DVB-H) Multichannel Theme Channel funded by targeted advertising or telesales (DVB-T, DVB-H) Interactivity Interactive and Enhanced advertising Interactive services (DVB-T, DVB-H) Premium Content Access through: Pay-per-View Pay-per-Time Pay-per- Category (DVB-T, DVB-H) Renting of Spectrum on proprietary Digital Terrestrial Transmitting Network to: non-captive TV content provider (DVB-T) mobile operators (DVB-H) 22 22
Mediaset DTT Project Development DTT Penetration PHASE 3 (2006) PHASE 2 (2H2005) PHASE 1 (1H2005) Mobile TV Business (DVB-H) Pre-paid card and MHP Integration Introduction of other pre-paid funcions (ie. Pay per time) Launch of new PPV Content (Reality, Movies, etc.) Introduction of Seasonal Ticket or Package Ticket Launch of Rechargeable cards Launch of PPV Offer on a Key content (Soccer) Launch of a new theme channel (Boing) Launch of DTT Platform Creation of a Digital Terrestrial Infostructure 23 23
Mediaset 4 DTT Innovation Areas FTA TV Innovation: enhanced commercial TV, new free channels, new digital contents new advertising models Pay TV Innovation on DTT: Pre paid card, Proprietary Conditional access Business Model Innovation: no subscriptions and PPV, Content Acquisition, DVB-H agreement with mobile operators Technology Innovation using open DVB standards: DVB-T, MHP, DVB-H 24 24
Mediaset From FTA TV to Media Company DVB-H (2006) Digital Terrestrial Television (2004) Pay per View (2005) 25
Financials
Mediaset Group Track Record 1999 2000 2001 2002 2003 2004 2005 Ebit Margin (ROS) * (%) 27.3% 29.3% 25.0% 24.1% 26.8% 30.3% 30.2% Net Profit (Euro ml.) 339.2 423.5 248.4 362.0 369.7 549.6 603.4 Free Cash Flow ** (Euro ml.) 370.5 255.0 123.9 219.8 282.9 466.9 199.6 Earnings per Share (Euro) 0.29 0.36 0.21 0.31 0.31 0.47 0.51 Dividend per Share (Euro) 0.18 0.24 0.21 0.21 0.23 0.38 0.43 Distributed Dividend (Euro ml.) 216.2 283.2 247.8 247.4 271.3 448.8 489.5 Pay-out Ratio (%) 64% 67% 67% *** 68% 73% 81% 81% From 2004 IFRS/IAS (*): Italian Business (**) Italian Business, excluding Associates Investments and Tele5 Dividend (***): excluding Kirch Media extraordinary provisions 27 27
Mediaset Italian Business 2005 Operations Breakdown (Euro ml.) Total Net Revenues Total Costs (including D&A) Operating Profit Margins FTA TV 2,585.7 (1,772.4) 813.3 31.5% Network Operator 137.8 (133.6) 4.2 16.2% Pay TV 44.2 (55.8) (11.6) n.m. Other Activities 92.5 (110.5) (18.1) n.m. Intra-company Eliminations (112.0) 112.0 - TOTAL 2,748.1 (1,960.3) 787.8 28.7% 28 28
Investor Relations Department: Tel: +39 02 2514.7008 Fax: +39 02 2514.6719 Email: ir@mediaset.it WebSite: www.mediaset.it/investor/ Forward-looking Statements Statements contained in this document, particularly the ones regarding any Mediaset Group possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties. Mediaset Group actual results and developments may differ materially from the ones expressed or implied by the above statements depending on a variety of factors. Any reference to past performance of Mediaset Group shall not be taken as an indication of future performance. This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein.