Tiscali: Company Presentation Deutsche Bank Conference Italian Champions. Milan, 17th May 2007

Transcription

1 Tiscali: Company Presentation Deutsche Bank Conference Italian Champions Milan, 17th May 2007

2 Five years of continuous growth in the broadband arena DSL SUBSCRIBERS (000) ACHIEVEMENTS Aug 2006 Acquisition of VNL Triple play CAGR 95% Mbps offer First DSL VoIP launch (UK) Start LLU unbundling (IT) Launch of Free Internet 2003 (UK) Launch of Bitstream 2004 (IT) Starts LLU unbundling Adsl Services Launch 1

3 bring to top-line and profitability increase in FY2006 FY06 FY05 Increase % DSL Subscribers 000s 1,855 1, % of which direct (ULL) ,9X Revenues % Gross Operating Result (EBITDA) % % 15% 13% Net Result of Continued Operations (59.7) (106.9) % Capex % FCF (114.0) (102) (12.0) (12%) NFP (397.2) (302.5) (94.7) (31%) 2

4 and in 1Q07 ml 1Q07 % of rev. 1Q06 % of rev. Delta 1Q06/1Q07 DSL users 000s 1,955-1,439-36% of which direct % Revenues % % 25% Access % % 17% Voice % % 67% B2B 13,0 7% % 16% Media and VAS % 9.6 6% 29% Other 0.4 1% 1.2 1% nm Gross Margin % % 23% Operating costs % % 20% Gross Operating Result (EBITDA) % % 36% EBIT (16.8) nm (12.3) nm -37% New EUR 280 Ml financing from Banca Intesa SanPaolo in place as of February 2007 All outstanding bonds have been reimbursed in FY2006 3

5 Tiscali well positioned to capture the new market opportunities Traditional Services Market Innovative IP Services Market (*) Tiscali view on IP market ( Bln) CAGR % TISCALI S S STRENGHTS Leading edge Full-IP network and platforms (VoIP and IPTV) Solid brand in innovative services Wide IP customer base 90% current Group revenues from IP products Opportunity to leverage strengths in the new environment Source: IDC, Gartner, Tiscali analysis Note (*): figures include: Broadband access, VoIP, Internet Services plus Traditional Voice and Line Rental as a proportion of the projected broadband penetration 4

6 Strategy based upon 3 key pillars, reinforcing Tiscali strategic position P I L L A R S Country Focus Infrastructure Focus IP proposition Focus Focus on UK and Italy Maximization of exit value in The Netherlands, Germany, Czech Republic Simplification of Group structure and organization Acceleration of LLU deployment Nationwide IP coverage through Wholesale/IPstream Leading edge IP platforms and services (VoIP and IPTV) Addressing the total customer spending through an innovative product proposition 1.9 Mln unbundled subscribers in %+ Revenues CAGR

7 Focus on UK and Italy RATIONALE Markets with highest expectations on broadband growth 3.4 Mln Customer base, 60% Broadband broadband customers registered per day 15 Mln households already LLU addressable and over 700K subscribers already connected 90% brand awareness 800+ Mln monthly page views on portal 6

8 The IP-Play strategy PRODUCT LINES IP-Play Play Strategy Quad IP-Play IP Convergence Develop an aggressive service Triple IP-Play TV Triple IP-Play Mobile suite proposition built on IP Basic Tiscali s native IP capabilities Single IP-Play Data Single IP-Play Voice Double IP-Play Target total IP Network IP Brand IP Portal customer spending IP Customers ENABLERS Future opportunities 7

9 Enablers The IP Network UK Italy LLU Sites Today EOY 07 EOY08 Addressable Market - mn Households - STRENGHTS Fully Operational LLU Access Network 100% sites DSL2+ (24Mbps) 100% POTS compatible sites National IP coverage in non LLU areas through Wholesale access Advanced IP platform already available 22,8 25,1 VoIP (Italy & UK) UK Italy 16,0 13,7 16,0 9,2 6,8 9,1 9,1 Today EOY 07 EOY08 IPTV available in UK (Italy 2Q07) Among the largest European LLU operators by YE07 8

10 Enablers The Brand STRENGHTS #3 fixed Telco brand in the UK Among top 10 UK Superbrands 90% brand awareness in Italy Among most popular internet brands in Europe Note: 9

11 Double IP-Play Double IP-Play package 10 MBPS BROADBAND ACCESS INCLUDING: Incumbent Line rental Unlimited broadband traffic Wi-Fi home coverage Home Multiline Numbering Softphone Free VoIP National International (via Softphone) 10

12 Triple IP-Play TV Triple IP-Play TV package IP-Play Play TV Offering IP BASIC PACKAGE + DTT free channels + Replay TV Hybrid set-top-box DTT/IPTV Basic package of VOD and thematic channels + IP-Content Premium Offering Premium channels package VOD premium channels and suite PPV soccer games and events Price depending on content suite 11

13 Targets RETAIL CUSTOMERS Mn ARPU Average ( ) Narrowband + BB Indirect Direct 2,9 2,2 0,7 3,2 2,1 1,1 3,5 1,6 1,9 CAGR +48% Avg Total Customer Spending CAGR +16% % Direct customers March % ARPU - Direct ( ) 54% CAGR +11% March %AMPU 43% +5 pp PAYBACK Direct (months) March March

14 Milestones and targets UK Nov. 06 Double IP Play launch Mar. 07 Triple IP Play TV launch 1Q 07 Homechoice integration 1Q 08 Milestones Complete LLU network Targets LLU Sites: 800 YE 07; 1,000 1Q 08; Customers (YE 10) 1,8 Mln broadband 1,3 Mln LLU 35% IPTV (on LLU) +3pp market share 22% Revenues CAGR 29% EBITDA margin by YE 10 13

15 Milestones and targets Italy Nov. 06 Double IP Play launch 3Q 07 Triple IP Play TV launch YE 07 Milestones Complete LLU network Targets 630 LLU Sites by YE07 Customers (YE 10) 0,9 Mln broadband 0,6 Mln LLU 18% IPTV (on LLU) +3pp market share 18% Revenues CAGR 23% EBITDA margin by YE 10 14

16 Homechoice: the leading IPTV service in UK Ownership and control of its endto-end IPTV service delivery platform Commercial IPTV service launched in September 2004 Availability of most relevant content deals in UK in all premium areas: movies, sport, information, kids, music, One of the most advanced and user-friendly programming guide for TV and VOD services HOMECHOICE PRODUCT OFFERING 100+ broadcast and VoD channels 1,000+ movies available on-demand 5,000+ music videos available ondemand Network-based EPG & time-shifted TV Award-winning products and services 15

17 Customer base TOTAL CUSTOMERS (Mn) Direct customers (Mn) CAGR 25% 3,5 1,9 3,0 3,2 0,6 0,6 1,1 Narrowband 1,2 1,0 CAGR= +11% % on total customers 2006A % 47% 54% Indirect customers (Mn) Retail DSL 2,1 2,9 CAGR -7% 1,9 2,5 2,1 1, % on total customers 2006A % 53% 46% 16

18 Group Revenues and Margins REVENUES ( Mln) CAGR= +20% GROSS MARGIN ( Mln) CAGR= +22% A A INDIRECT COSTS ( Mln) CAGR= +9% EBITDA ( Mln) CAGR= +40% % personnel cost on revenues % M&S cost on revenues 2006A % 6% 11% 11% % of revenues 2006A % 18% 26% 17

19 Group Capital Expenditures Total Investments ( Mln) Mix by type (% of cum capex = < 750 Mln) Service & other < 150 Services & Other 22% Net work 31% Customer Related < 150 M < 250M < 350M Network Customer related 47% 18

20 Funding /12/2006 * Capex Restr.& Fin OCF Disposals 31/12/2007 NFP over Cost EBITDA 3.9X 1.6X * NFP includes shareholders loans CASH GENERATION > 400 Mln 19

21 Fixed-Mobile Convergence opportunity New technologies allow a competitive fixed-mobile offer proposition based on IP Integrated networks (Wi-FI Wi-Max) and phones (Wi-Fi/UMTS-GSM) Integrated voice services (VoIP and netphones) Integrated contents ( s, TV) MVNO market is rapidly growing (10% average penetration in Europe EOY10) IP Convergence on mobile services allow to Develop new lines of business increasing revenues and margins Increase fixed customer base loyalty Regulatory environment currently differs in the 2 countries: (UK: MVNO is already commercial. Italy: MVNO not allowed but commercial agreement are in the the final phase of definition) Tiscali is currently considering: Agreement with MNO Management team and operational model Economics 20

22 Disclaimer This presentation contains unaudited and/or proforma financial data; it also includes forward-looking information that is subject to risks and uncertainties associated with Tiscali and the Internet sector. This information reflects Tiscali s management expectations, based on currently available information. The forward-looking information reflects certain assumed market parameters and other assumptions, but may differ materially from actual future results. This presentation does not constitute an offer of Tiscali shares. Not for release, publication or distribution, in whole or in part, in or into United States, Canada, Australia or Japan. 21

23 Q&A