US Roadshow Presentation January 2007
| 1 | Mediaset | From FTA TV to Media Company
DVB-H Digital (2006) Terrestrial Television Core Business (2004) 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 2005: 3,678.0 ml Euro
Pay per View (2005)
| 2 | | 2 | Core Business FTA Television
| 3 | Broadcasting | TV Strength in Italy
1997-2005: Total Audience (24 Hours)
9,284 9,213 9,188 9,095 9,140 8,915 8,848 8,630 8,494 239 239 y) per da inutes 8,113 tion (m nsump TV Co
212
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: Auditel (24 hours, average minute)
| 4 | | 4| 4|| | Broadcasting | Leadership of FTA TV in Italy
% of people per week 2001 2005
ANALOG TV 95.8 93.9
SATELLITE TV 11.9 16.7
RADIO 68.8 63.5
PRESS 60.6 59.1
BOOKS 54.0 55.3
INTERNET 20.1 37.6
WEEKLY - 32.5
MONTHLY - 22.2
MOBILE PHONES 72.8 78.9
Source:” Quinto Rapporto Censis sulla comunicazione in Italia, 2001-2006”, November 2006
| 5 | Broadcasting | Mediaset Leadership on Audience Share (2006, % audience share)
24 Hours Prime Time
44.2 43.3 42.8 43.5 41.3 40.6 39.5 41.5
Individuals Commercial Target Individuals Commercial Target
Source Auditel, excluding World Cup. Commercial Target 15-54 years
| 6 | | 6 | Advertising Expenditure in Europe
Total Ad Spend per Capita Total Ad Spend as % of GDP 2005 (US$)
255 249
0,97 0,95 180 1,02 0,97 0,96 154 151 0,89
0,80 0,80 0,75 0,73 0,74 0,74 0,71 0,73 0,66 0,75 0,62 0,62 0,61 0,61 0,64 0,62 0,63 0,60 0,60
2001 2002 2003 2004 2005 UK Germany France Spain Italy UK Germany Spain
France Italy
Source Zenith Source Zenith Optimedia April 2006, Global Insight
| 7 | | 7 | Advertising | Mediaset vs. ADV Cycle
1997, Index 100
163 159
145 Total 142 Advertising 137 136 147 Market 143 124 136 136 131 134 111 122 100 111 100
1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Publitalia elaboration on Nielsen AdEx data
| 8 | | 8| 8| | Financials | Mediaset Leading Indicators
Net Revenues (ml Euro) Operating Profit (ml Euro)
CAGR (1997-2005): 9.9% CAGR (1997-2005): 12.8%
3,678 1,201
1,734 46.9459.2 45.8 1997 2005 1997 2005
Net Profit (ml Euro) Dividend per share (Euro)
CAGR (1997-2005): 12.3% CAGR (1997-2005): 17.3% 0.43 603.4
238.8 0.12
1997 2005 1997 2005
| 9 | 9 | Italian Advertising Market | Potential Structural Growth
Ad-spend = 0.96% UK Nominal GDP
UK Total Adv. Market
Industry Deregulation Privatisation Italian Total Adv. Market Evolution
Ad-spend ITA = 0.62% Nominal GDP 2005 2014
| 10 | | 10 | The advent of Digital TV
| 11 | TV Platform | Italian Competitive Scenario - 2001
Commercial Theme PPV VOD Operators 2001 Channels Channels Operators
Analog TV n.a. n.a. n.a.
DTT
Satellite Pay
IPTV
DVB-H
| 12 | TV Platform | Italian Competitive Scenario - 2006
Commercial Theme PPV VOD Operators 2006 Channels Channels Operators
Analog TV n.a. n.a. n.a.
DTT Free/Pay
Satellite Pay
IPTV Pay
DVB-H Pay
| 13 | TV Platform | Mediaset Competitive approach
2004 2005 2006
DTT PPV DVB-H
Mobile FTA DTH Cable ADSL UMTS
| 14 | Mediaset | Business Model
Content Provider Network Provider
FREE-TO-AIR TELEVISION PAY TV NETWORK OPERATOR Commercial TV Premium Content Access Renting of Spectrum on proprietary 3 generalistic channels funded by through: Digital Terrestrial Transmitting advertising Pay-per-View Network to: (Analog, DVB-T, DVB-H) Pay-per-Time Captive to Mediaset channels Multichannel Pay-per- Category (Analog) Theme Channel funded by (DVB-T, DVB-H) non-captive TV content provider targeted advertising or telesales (DVB-T) (DVB-T, DVB-H) mobile operators (DVB-H) Interactivity Interactive and Enhanced advertising Interactive services (DVB-T, DVB-H)
| 15 | | 15| 15 || | Digital Terrestrial overview
| 16 | DTT | DTT roadmap in major European countries and the USA
?
(1) General agreement on the unfeasibility of completing national switch-off by 2010 (2) Higher than expected DTT development may allow for switch-off in 2008 (3) Re-launch of DTT on a regional base in 2002; national DTT re-launch in 2005
Sources: EPRA / AGCOM – Working Group on DTT (June 2004), DigiTa; Digital TV Group; Booz Allen Hamilton analysis
| 17 | | 17 | 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) on air (open to all telecom and mobile content providers)
Sources: DGTVi; FUB; Booz Allen Hamilton analysis
| 18 | | 18 | DTT Development in Italy | Coverage
Transmission Number of DTT Population Technology Operator multiplexes Coverage
2 mux 80% - ≃ 65%
2 mux >70%
DVB-T 2 mux ≃ 70% - ≃ 65%
1 mux ≃ 68%
1 mux ≃ 47%
1 mux n.a. DVB-H 1 mux n.a.
Source: DGTVi, Corporate website - Local TV MUXs are not included
| 19 | | 19 | DTT widened multichannel offering up to 30 channels 30 free-to-air national channels + PPV services
MainMain analogueanalogue channelschannels inin simulcastsimulcast ++ interactivityinteractivity SportSport andand sportsport newsnews
i i i i i SPORT
SOLOCALCIO i i i
News:News: financial,financial, international,…international,… KidsKids ShoppingShopping MusicMusic channelschannels
i i i i i
CultureCulture andand InformationInformation 1111 PayPay perper ViewView servicesservices
i i i i i i
ii withwith interactivityinteractivity Channels in simulcast New free DTT channels New pay DTT services
Note: “Camera” and “Senato” channels are included because their current coverage is below 50% Sources: DGTVi; Sat-Net; Booz Allen Hamilton analysis
| 20 | DTT Development in Italy | Set-Top-Box Penetration
DTT STB penetration
4,500 4,200 3,800 3,600
2,100 95% are Interactive STB’s 1,250
340 0 jan 04 jul 04 jan 04 june 05 jan 06 mar-06 sept-06 dec 06
Driver for DTT success STBs Price History
390 Subsidy Content offering Net Price Premium contents (pay per view) € 150 Retail Price (gross of Sudsidy) Free channels 250 199 Interactive services 179 € 150 149 119 Accessibility € 150 € 150 99 Plug and Play installation € 70 69 49 “Affordable” pay offering € 239 € 99 € 49 € 29 € 149 € 49 € 99 € 69 € 49 jan 04 mar-04 may 04 sep 04 dec 04 apr-04 nov-05 apr-05 today Source: GfK Marketing Services Italia
| 21 | | 21| 21 || | Pay-Per-View
| 22 | Pay-Per-View | First Pre-paid card Offer on TV
BENEFITS FOR VIEWERS BENEFITS FOR MEDIASET No dish required Focused Investments No Subscription Defensive Move “Pay for what you watch” Driver for DTT Penetration Clear and simple technology Additional Revenues
Credit recharged on the Card Credit used watching Mediaset Premium Content 4 1
Credit sent OTA Credit Purchased (on- (Over the Air) to the STB 3 2 line / off line)
| 23 | | 23| 23 || | Pay-Per-View | “Mediaset Premium” content offer
Football Theatre and Concerts Movies
Reality Games Fiction
| 24 | | 24 | Pay-Per-View | SmartCard Development
5.380.000 5.500.000
4.882.000 5.000.000
4.500.000 4.338.000
4.000.000 3.780.000
3.500.000
2.820.000 3.000.000 2.574.000 2.729.000 2.628.000 2.470.000 2.500.000 2.428.000 2.306.000 2.369.000 2.092.000 2.048.000 1.951.000 1.908.000 1.922.000 2.000.000
1.403.000 1.798.000 1.500.000 1.232.000 1.438.000 981.000 1.282.000 1.000.000 1.050.000
698.000 500.000 254.020 471.000
0 jul-'05 aug-'05 sept-'05 nov-'06 dec-'05 feb-'06 mar-'06 apr-'06 jun-'06 aug-'06 sept-'06 oct-'06 nov-06 dic-06
| 25 | | 25| 25|25 25|| ||| | | Network operator
| 26 | Network operator | DVB-T and DVB-H
Digital Terrestrial Network
DVB-T DVB-H
Digital Terrestrial Set-Top-Box Mobile Handset, PDA, Portable TV
Open Platform Open Platform Limited Broadcasting Capacity Tv content can be broadcast in original format Ideal for FTA Broadcasting and DVD quality Channel multiplication Low power consumption for handset 2 MUX. already hosting 3rd party channels Needs only a small antenna
4 – 6 Mbps per channel 200 – 500 kbps per channel 4 – 6 channels per Multiplex 20 – 25 channels per Multiplex
| 27 | | 27 | DVB-H | Mediaset Agreements with Mobile Operators
Transmission Content Network
- 3 Commercial Channels -“SeriesA”Championship - Champions League
- 3 Commercial Channels -“SeriesA”Championship - Boing (kids channel)
| 28 | | 28 | Future Developments
| 29 | Mediaset | 4 DTT Innovation Areas
Pay TV Innovation on FTA TV Innovation: enhanced commercial TV, DTT: Pre paid card, new free channels, Proprietary Conditional access new digital contents new advertising models
Business Model Technology Innovation Innovation: using open DVB no subscriptions and PPV, standards: Content Acquisition, DVB-T, MHP, DVB-H DVB-H agreement with mobile operators
| 30 | | 30| 30 || | Mediaset Group | Possible Future Developments
Unique position in Italian and Spanish advertising market Content Strong TV franchise In-house production and creativity of mass audience content Control on key content rights (football) Transmission network ownership Leader and first mover in the platform Geography technological development (DTT-DVB-H) Strong track record and execution Strong financial capability
Access
| 31 | | 31| 31 || | Back up Slides
| 32 | 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
| 33 | | 33| 33 | | Mediaset Group | Financial Track Record Main Income Statement Data (ml €) 2000 2001 2002 2003 2004 2005 Total Net Revenues 2.363,6 2.351,1 2.316,1 3.070,0 3.421,6 3.678,0 Italy 2.363,6 2.351,1 2.316,1 2.424,9 2.629,4 2.748,1 Spain - - - 646,0 793,4 931,1 Operating P rofit 691,5 587,2 558,5 820,8 1.090,5 1.201,0 Italy 691,5 587,2 558,5 650,1 795,7 787,8 Spain - - - 170,7 294,9 413,3 Group Operating P rofit 691,5 587,2 558,5 777,6 1.090,5 1.244,1 Pre-Tax Profit and Minorities 648,0 418,1 497,1 675,1 1.046,1 1.202,2 Group net Profit 423,5 248,4 362,0 369,7 549,6 603,4
Main Balance Sheet and Financial Data (ml €) 2000 2001 2002 2003 2004 2005 Tota l Ne t S ha re holde rs 'E quity 2.389,2 2.354,6 2.468,7 2.832,5 3.096,4 2.879,7 Ne t Group S ha re hold e rs ' E q uity 2.387,5 2.353,0 2.467,2 2.591,6 2.865,3 2.593,9 Minorities Shareholders' Equity 1,7 1,6 1,5 240,9 231,1 285,1 Net Financial P osition 125,3 (247,8) (170,8) (199,3) 62,0 (358,0) Ope ra ting Ca s h F low 1.146,6 1.162,3 1.213,4 1.537,6 1.601,0 1.606,8 Investments 806,1 1.279,1 849,3 835,1 1.116,5 1.162,2 Dividend P a id 216,2 283,2 247,8 247,4 271,3 448,8 2004 Restated IAS/IFRS
| 34 | | 34| 34 | | Mediaset Group | Financial Track Record
Personnel 2000 2001 2002 2003 2004 2005 Employees (at year end) 4.384 4.396 4.393 5.600 5.662 5.844 Ita ly 4.384 4.396 4.393 4.395 4.459 4.671 S pa in - - - 1.205 1.203 1.173 Employees (Average) 4.382 4.384 4.399 5.587 5.638 5.798 Ita ly 4.382 4.384 4.399 4.396 4.415 4.613 S pa in - - - 1.191 1.223 1.185
Main Performance Indicators 2000 2001 2003 2004 2005 2002 ROI 32,4% 24,1% 21,3% 27,4% 36,0% 39,7% ROE 18,6% 10,5% 15,0% 14,6% 20,1% 22,1% N° S h a re s 1.181.227.564 1.181.227.564 1.181.227.564 1.181.227.564 1.181.227.564 1.181.227.564 EPS (€) 0,36 0,21 0,31 0,31 0,47 0,51 DP S (€) 0,24 0,21 0,21 0,23 0,38 0,43
2004 Restated IAS/IFRS
| 35 | | 35| 35 | | Investor Relations Department:
Tel: +39 02 2514.7008 Fax: +39 02 2514.6719 Email: [email protected] 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.
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