Transcript No Slide Title

Creating the leading panEuropean internet network
Presentation
company to analysts
7 September 2000
Key management team
Renato Soru
Chairman and Chief Executive
Tiscali
James Kinsella
Chairman
World Online
Massimo Cristofori
Finance Director
Tiscali
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Presentation order
Key investment highlights
Background and strategic vision
Overview of the new group
Benefits of the combination
Pro forma data
Summary
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Key investment highlights
The internet network for the people of Europe
Leading the consolidation in Europe
Independent of traditional telcos
Faster path to breakeven
Creating the leading pan-European
internet network company
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Background and strategic vision
Deregulation
Disruptive new technologies
Emergence of the
networked market
A pan-European internet network company
generating multiple revenue streams through the
provision of content and services across all devices
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Strategic vision
 Voice
New telco company  Access
 Business services
Customers
N
e
t
w
o
r
k
 Content
Media aggregator and
distributor
distribution
services
 Advertising
 Vortals, e.g.:
New retailing platform
—
—
finance
travel
 Partnerships
A unified network with the largest European customer base providing
new telco, media and retailing products and services
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Overview of the new group
The largest pan-European subscriber base
 Largest pan-European footprint
covering 15 countries
Sweden
 Top 3 positions in 5 countries
(by subscribers)
Norway
 Largest pan-European internet
community with 6.1m registered
subscribers (3.5m active)
Denmark
UK
Neth.
Belgium
Germany
Lux.
Czech
Austria
 Second largest subscriber base
in Europe
Switz.
France
Italy
Spain
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Overview of the new group
Creating the largest proprietary optical IP network in Europe
 Ready for broadband
 Direct peering relationships
across Europe provide highest
quality of service
 Over 300 points of presence
spread across 15 European
countries
 Five fibre rings connecting major
cities of Western Europe
 Backbone connections to
New York, Chicago, Washington
and the US West Coast
 Exploiting the oversupply of fibre
in Europe by acquiring IRUs
 Investing in WLL across Europe
Existing network
New network planned
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Overview of the new group
A full service provider
Telco licence
Denmark
France
Germany
It aly
Luxembourg
Norw ay
Net herlands
Sw it zerland
UK
Spain
Belgium
Czech Republic
Sout h Af rica
Sw eden
Aust ria
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p
p
ISP/port al
Business
services
Broadband
by Y/E
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Key:
P = application pending
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Benefits of the combination
 Establishing a single communication platform
Customers
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for the people of Europe
with a full range of services
Ease of use and “always home”
wherever you are in Europe
 Superior positioning for convergence
 “Must-buy” network for advertisers and
Company
Investors
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e-commerce partners
Strong platform for further consolidation
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Depth of talent and management experience
Significant revenue and cost synergies
Faster break-even
Financial strength
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Superior positioning for convergence
Fixed
Unified
messaging
Voice
services
Mobile
PC
Combined
IP based
unified
network
Streaming
TV
UMTS
Broadband
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Advertising
Significant revenue synergies
 Enhanced ability to provide and bundle
Pan-European
IP network operator
Single brand and customer
proposition
new converged services
 Captures greater proportion of interconnect
revenues
 Improves business services
 Single brand generates more customers
 Leverage best content, applications and
business services across the new group
 “Must-have” network for advertisers, key
Superior scale and profile
content and e-commerce providers
 MVNO and UMTS services
Andala relationship
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Significant cost savings
Total net cash saving
Recurring savings
 Operating cost savings
 Comprising
—
opex of €280–300 million
—
network capex of
€300–330 million
—
equivalent to approximately €150
million pre-tax saving on an
annualised, ongoing basis
Indicative breakdown
less one-off cash costs of
around €30 million
Overheads
35%
M arket ing
45%
Net w ork/
t elecommunicat ions
20%
Total net cash savings of approximately €550–600 million
Total approx. e150m
over the first two full years
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Depth of combined management
Proven leadership and experience
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Renato Soru
James Kinsella
Massimo Cristofori
Simon Duffy
Paolo Susnik
Salvatore Pulvirenti
Paola Mastromarino
Mario Mariani
Laurent Grimaldi
Klaus Landefeld
Bob McNeal
Martin Stever
Debby Fry Wilson
Peter Randall
Executive Chairman
Chief Executive Officer
Chief Financial Officer
Mergers and acquisitions
(Technology)
(Technology)
(Technology)
(Marketing)
(Network)
(Network)
(Strategy)
(Advertising)
(Communications)
(Operations)
Depth of talent and expertise
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Pro forma data
6 months to 30 June 2000
(em)
Revenue
Tiscali
World Online
Pro forma
combined
69
96
165
(17)
(179)
(196)
9
1,569
1,578
Internet minutes (in June 2000)
612m
1,050m
1,662m
Subscribers
- registered
- active
2.3m
1.1m
3.8m
2.4m
6.1m
3.5m
EBITDA
Net cash (at 30 June 2000)
 Pro forma market capitalisation – e12.5 billion
 Targeting EBITDA positive during H2 2001
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Pro forma combined revenue
Sources of revenue for the combined group
Pro forma for 6 months
to 30 June 2000
Port al revenues Ot her
(inc. advert ising) 3%
6%
Business
services
11%
Estimated by 2002
Port al revenues
(inc. advert ising)
17%
Voice
19%
Business
services
12%
Dial-up access
61%
Dial-up access
39%
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ADSL
13%
Voice
19%
Transaction structure—key terms
 Tiscali shares1 to the value of e20 per share for each
Structure
Ownership2
World Online share within collar
 Asymmetric collar: - 11% / +7.5%
 56.7% Tiscali shareholders (35.5% Renato Soru)
 43.3% World Online shareholders (18.3% Sandoz
Foundation)
Governance
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Renato Soru (Executive Chairman)
James Kinsella (CEO)
Board of 9 (5 existing Tiscali and 4 World Online)
Headquarters and listing in Milan
Incorporated and based in Cagliari
 World Online: Sandoz Foundation and Reggeborgh,
Irrevocables
Lock-ups
equivalent to 54%
 Tiscali: Renato Soru, equivalent to 63%
 Sandoz Foundation, 9 months
 Renato Soru, 9 months (subject to minor exemptions)
Note:
1 Exchange ratio of 0.4353 at a Tiscali share price of e45.95
2 Based on a Tiscali share price of e45.95, assuming full acceptance
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Expected transaction timetable
7 September
Mid/late
Text
October
Mid November
Public announcement
Text Memorandum posted and Offer period starts
Offer
Tiscali EGM to approve capital increase
Mid/late
Text
November
Text closing date
First
Mid/late
Text
November
Text court approval of Tiscali’s EGM resolution
Italian
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Summary
The internet network for the people of Europe
Leading the consolidation in Europe
Independent of traditional telcos
Faster path to breakeven
Creating the leading pan-European
internet network company
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Q&A
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UBS Warburg, a business group of UBS AG, Rothschilds and Schroder Salomon Smith Barney, which are
each regulated in the UK by The Securities and Futures Authority Limited, are each acting for Tiscali in
connection with the Offer and for no one else and will not be responsible to anyone other than Tiscali for
providing the protections afforded to customers of UBS Warburg, Rothschilds and Schroder Salomon Smith
Barney respectively or for providing advice in relation to the Offer.
Goldman Sachs International and Merrill Lynch International, which are each regulated in the UK by The
Securities and Futures Authority Limited, are each acting for World Online in connection with the Offer and for
no one else and will not be responsible to anyone other than World Online for providing the protections
afforded to customers of Goldman Sachs International and Merrill Lynch International respectively or for
providing advice in relation to the Offer.
These materials relate to the Offer and are not an extension of a tender offer in the United States or to any
US Person for any class of equity securities in World Online. The Offer will be made by means of an Offer
Memorandum to be distributed to the World Online shareholders. Any decisions regarding the Offer should
only be made on the basis of such Offer Memorandum.
None of the securities to be offered as consideration will be registered under the United States Securities Act
of 1933, as amended (the “Act”). Accordingly, such securities may not be offered, sold or delivered in the
United States or to US Persons, unless an exemption from the registration requirements of the Act is
available.
These materials do not constitute an offer of Tiscali Shares or an offer for World Online Shares.
Not for release, publication or distribution, in whole or in part, in or into Canada,
Australia, Japan or Germany.
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