TMT Conference London, 7th June 2006 Mediaset | 2003-2006, Consistency with our Strategy N ov Focus on the Core Business Profitability em Assessing All the Growth Opportunities be r 2 TECHNOLOGICAL DEVELOPMENT GEOGRAFICAL EXPANSION 002 Rights Trading DTT (Pay/Free)DTT Mobile Tv (DVB-H) PubliEurope ADSL Emerging Market Other digital platform (East Europe, Others)
Core Business Cross Media Ownership Creativity/Content House
DTT switch off “date Teleshopping
VERTICAL INTEGRATION LEGAL FRAMEWORK
Mediaset Group
| 2 | 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: 3,678.0 ml Euro
Pay per View (2005)
| 3 | TV PLATFORM | Italian Competitive Scenario
Mediaset Competitive approach vs. Convergency
2004 2005 2006
DTT PPV DVB-H
Mobile FTA DTH Cable ADSL UMTS
| 4 | TV PLATFORM | Italian Competitive Scenario
Mediaset Competitive approach vs. Convergency
2004
DTT
FTA
| 5 | DTT roadmap in Europe and USA
Year Country 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)
1300 1000
UK Germany Italy Spain France 470 3500 120 2400 2500 2300 700 1300
272 8900 7900 6400 4400 2900 1800 1000
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| 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
| 9| 9 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
| 10 | DTT Development in Italy | Set-Top-Box Penetration
DTT STB penetration
≃4,000 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
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 Accessibility € 150 119 € 150 99 Plug and Play installation € 70 79 “Affordable” pay offering € 239 € 99 € 49 € 29 € 149 € 49 € 99 € 79 jan 04 mar-04 may 04 sept 04 dec 04 apr-04 nov-05 today Source: GfK Marketing Services Italia
| 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 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)
| 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 31st 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
Mobile FTA DTH Cable ADSL 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 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
| 18 | Mobile TV | DVB-H Value Chain
Content Content Commercial Access Broadcast Equipment Providing Edition DIstribution (CAS+Billing)
FTA Channels Mobile Handset Theme Manufacturer Channels (partially PPV Content subsidiared by mobile Other selected operators) content (i.e. news,”best of”, etc.)
Open platform Non-exclusive agreements
| 19 | Mobile Tv | Mediaset Agreements with Mobile Operators
Transmission Content Network
- 3 Commercial Channels -“SeriesA”Championship - Champions League
- 3 Commercial Channels -“SeriesA”Championship - Boing (kids channel) “On Air” “On Air” Already covering all from 5th June 2006 big Cities in Italy
| 20 | MEDIASET DTT Business Model
| 21 | Mediaset | DTT 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 non-captive TV content provider Multichannel Pay-per- Category (DVB-T) Theme Channel funded by (DVB-T, DVB-H) mobile operators (DVB-H) targeted advertising or telesales (DVB-T, DVB-H) Interactivity Interactive and Enhanced advertising Interactive services (DVB-T, DVB-H)
| 22| 22 || | Mediaset | DTT Project Development
Mobile TV Business (DVB-H) PHASE 3 Pre-paid card and MHP Integration (2006) Introduction of other pre-paid funcions (ie. Pay per time)
n
o
i Launch of new PPV Content (Reality, Movies, etc.) t PHASE 2 a Introduction of “Seasonal Ticket” or “Package Ticket” r (2H2005)
t
e Launch of Rechargeable cards
n
e
P
T PHASE 1 Launch of PPV Offer on a Key content (Soccer) T (1H2005)
D Launch of a new theme channel (Boing) Launch of DTT Platform Creation of a Digital Terrestrial Infostructure
| 23| 23 || | 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
| 24| 24 || | Mediaset | From FTA TV to Media Company
DVB-H Digital (2006) 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
Total Net Total Costs Operating (Euro ml.) Revenues (including D&A) 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: [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.