Tiscali: Company presentation

Deutsche Bank ConferenceItalian ChampionsMilan 17th May 2006

2

Highlights

One of the largest independent telecommunication companies. 4.5 ml customers in 5 markets: Italy, UK, The Netherlands, Germany and Czech Republic

A significant dial-up customer base (2.6 ml), a growing broadband customer base (1.9 ml) and a recognised brand are the company’s key assets to take advantage of the broadband growth opportunity

Market capitalisation of EUR 1.1 billion, free float >60%

FY05 revenues stood at EUR 736 ml, EBITDA at EUR 117 ml

One of the largest and most interconnected IP and Voice Over IP networks in the world**

Completed a substantial refocusing of activities in 4 core markets and Czech Republic

Focus of direct DSL access through implementation of LLU networks in The Netherlands, Italy and UK

* Tiscali Group’s figures prepared in accordance with IAS/IFRS international accounting principles and the Group’s perimeter, including Italy, UK, Germany, The Netherlands, Czech Republic and TiNet IP.

** Source: CAIDA

3

Revenue trend

2.9 32.8

173.2

635.7

748.4

901.0

1,080.60

655.1736.2

FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2004 pro-forma

FY2005

EUR ml

*

Phase 1 – Expansion through M&APhase 2 –

Consolidation

Phase 3 –Refocusing through

disposals

IPO on Nuovo Mercato provides visibilty, funding and listed paper

Acquisitons of WOL and Liberty Surf provide international presence and scale

Disposal plan allows re-focusing 4 on core markets

Through > 50 acquisitions, achieved presence in 14 European countries + S. Africa

12 disposals to industrial buyers

(EUR 425 ml revenues sold)* Includes Italy, UK, Netherlands, Germany, Czech Republic and TiNet

4

Profitability trend - EBITDA

-619.9

-170.4

1

74.7108.8

77.4117.1

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2004 Pro-forma

FY 2005

EUR ml

*

Phase 1 – Expansion through M&APhase 2 –

Consolidation

Phase 3 –Refocusing through

disposals

* Includes Italy, UK, Netherlands, Germany, Czech Republic and TiNet

Major profitability improvement thanks to one company / one technology / one brand phylosophy DIsposals were EBITDA accretive (12% EBITDA margin vs 10% pre-disposals)

12 disposals to industrial buyers

(EUR 31 ml EBITDA sold)

5

Tiscali Group: Key figures

Breakdown of revenues by business line 1Q06

Breakdown of revenues by business line 1Q06

€ml FY04 FY05 % chg YoY

Revenues 655 736 +12% EBITDA 77 117 +51% EBITDA margin 12% 16% +33%EBIT (121) (74) +38%Net income (loss) (134) (13)* +90%FCF (110) (105) + 5% Capex (130) (169) +30%

Group – Consolidated FY05 results Group – Consolidated FY05 results

Geographical breakdown of revenues 1Q06

Geographical breakdown of revenues 1Q06

*Includes capital gain from disposal of Liberty Surf

Total: €202.7 ml

IT 25%

UK 49%

NL 12%

DE 9%

Others 4%

UK 44%

IT 20%

DE 3%

NL 29%

Others 5%

€ml 1Q05 1Q06 % chg YoY

Revenues 174 203 +17%EBITDA 27 29 +9% EBITDA margin 15% 14% -EBIT (14) (12) +14 %Net income (loss) (13)* (19) (40%)FCF (44) (13) + 70% Capex (37) (45) +22%

Group – Consolidated 1Q06 resultsGroup – Consolidated 1Q06 results

*Includes capital gain from disposal of Denmark and South Africa

B2B 7%

Other 1%

Media & VAS 5% Bitstr.

19%

Wholes. 20%

ULL 12%

Dial-up 24%

Voice 12%

Geographical breakdown of EBITDA 1Q06

Geographical breakdown of EBITDA 1Q06

Total: €29.2 mlTotal: €202.7 ml

6

Tiscali Group: Core countries’ snapshot

€ml FY04 FY05 Change%

BB subs 000s 387 934 141%BB mkt share 7% 10% 43Revenues 255 325 28%EBITDA 48 69 44%ULL network coverage: 25 active CoLos in the London area (as of 31 December 2005)

UKUK

€ml FY04 FY05 Change%

BB subs 000s 165 250 52%ULL users 000s 147 250 70%BB mkt share 6% 7% 17%Revenues 93 109 17%EBITDA 21 39 85%ULL network coverage: 60% of population 250 CoLos

NetherlandsNetherlands

€ml FY04 FY05 Change%

BB subs 000s 225 215 (4%)BB mkt share 2% 2% nmRevenues 95 89 (6%)EBITDA (5) 4 180%ULL network coverage: test in the Frankfurt area

GermanyGermany

€ml FY04 FY05 Change%

BB subs 000s 170 303 78%ULL users 000s 40 104 160%BB mkt share 4% 5% 25%Revenues 181 197 9%EBITDA 15 27 80%ULL network coverage: over 35% of DSL market, 367 CoLos

ItalyItaly

Note: The EBITDA per country is before allocation of corporate costs.

7

107 219 235252 281

362

1.926

1.3631.190

1.033902

1.715

1.480*436

0

400

800

1,200

1,600

2,000

2,400

1H04 4Q 04 1Q 05 1H 05 3Q 05 4Q 05 1Q 06

Thou

sand

s

ULLBistreamWholesale

UK46%

IT 29%

Others 2%DE

13%

NL 9%

Active users as of 31.03.2006

Evolution of ADSL users Evolution of ADSL users by country

Geographical breakdown of ADSL users Geographical breakdown of active users

* Following the sale of 60K wholesale customers* Net of the sale of 60K wholesale customers

303

934

250 215354

1,085

267 212

0200400600800

1,0001,200

Italy UK

The N

ether

lands

German

y

Thou

sand

s

31.12.2005 31.03.2006

UK56%

IT 18%

Others 1%

NL 14%

DE 11%

8

The broadband opportunity

- 2,0 4,0 6,0 8,0 10,0 12,0

Italy

UK

Netherlands

Germany

Lines (ml)BB - Incumbent retail BB - WholesaleBB - ULL BB - Cable, Powerline & Sat

High broadband growth driven by DSL

PTOs loosing market share

DSL is the main broadband access platform in Germany and Italy

The Netherlands are characterized by high cable penetration and fierce competition

UK is the market with the lowest share of PTO but with cable penetration relatively high

Broadband penetration rate on households - YE 2005

Broadband Access by segment YE05

Source: Company estimastes based on NRA, EU 10° Implementation report

Source: Company estimastes based on NRA, EU 10° Implementation report

31%

38%

60%

30%

0% 20% 40% 60% 80%

Italy

UK

Netherlands

Germany

9

Broadband growth in the 4 core markets

All 4 countries where Tiscali is present are expected to have a double-digit growth

The UK is forecasted to deliver the highest broadband revenue growth in Europe (ex-Ireland)

Italy is an interesting growth opportunity

Germany will be the largest broadband market in Europe and is expected to show highest customer growth in Europe (ex- Ireland)

The Netherlands, with the highest broadband market penetration (>50%), show the lowest growth rate

0,0

2,0

4,0

6,0

8,0

10,0

Italy UK The Netherlands Germany

$ bl

Broadband Access Revenues 2004 - 2010

Broadband Connections 2004 - 2010

-

5,0

10,0

15,0

20,0

25,0

Italy UK The Netherlands Germany

Line

s (m

l)

Source: IDC 2005

CAGR: +18% CAGR: +24% CAGR: +12% CAGR: +22%

CAGR: +18% CAGR: +23% CAGR: +11% CAGR: +24%

10

Focus on direct access

2%

7%

11%

5%

17%

14%13%

0%

2%

4%

6%

8%

10%

12%

UK Italy The Netherlands Germany

Mar

ket s

hare

s

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Shar

e of

Gro

ss a

dds

Market share Share of net adds

ADSL revenues by country Tiscali DSL market share as of 31.03.2006

LLU network coverage and investments

Country N. of CoLos % of HH Capex ULL (€ml)

Infrastructure only

4Q05 1Q06 4Q05 1Q06 4Q05 1Q06

Italy 367 440 35% 40% 12.0 14.1

UK 25 53 3% 6% 9.1 10.2

Netherlands 250 250 60% 60% 3.0 1.2

Germany Test in -

Frankfurt

11.4

32.1

13.08.4

16.0

60.5

18.3

7.2

0

10

20

30

40

50

60

70

Italy UK TheNetherlands*

Germany

AD

SL re

venu

es (E

UR

ml)

1Q05 1Q06

+40%

+89%

+41%

* Pro forma figures excluding ADSL customers disposed to KPN

Gross Margin by access type - YoY

73%81%

28%36%

22% 26%

0%

20%

40%

60%

80%

100%

1Q05 1Q06

ULL Bitstream Wholesale

19% 31% 50% 24% 37% 39%% DSL rev

11

B2C

NB Access BB Access

CPS

Voice VoIP

Content

Download

ContentVoD

PC

TV

Cross selling

Tota

l ow

ners

hip

Gross margin

2° phase

1° phase

High potential from the conversion of narrowband customer base into broadband customers

Opportunity to offer bundled services (voice+ access) and cross selling of content

Compensate decline of dial-up (GM>60%) with migration to own ULL network (GM>80%)

Innovative “good value for money”offers

Access drivenAccess driven

12

B2B

B2B

B2C

Corporations

Large &

International

Medium &

SME

SOHO

High end

Low endAccess

NB - BB

Voice (CPS – VoIP)

VISPVA

S bu

ndle

s

Supp

ort b

ack-

offic

e an

d pl

atfo

rms

Rem

ote

acce

ss &

Sec

urity

ser

vice

s

Acc

ess

pack

.

Who

lesa

le a

cces

s

VoIP

bun

dled

with

VPN

s

IP V

PNs

Solu

tions

Leverage B2C expertise

13

Portal

Main tool to gain access customers

VASFocus on Value Added Services as substantial revenue source with value added services as the main driverRevenue model: subscription-based

Content (Broadband)Enhance access and portal offer with broadband video and music contents, creating stickiness for usersComplete roll-out of Tiscali video-on-demand platform, Revenue model: Mixed (pay-per-use and subscription)

AdvertisingAgreements with Google to push advertising from sponsored searchesBenefit from forecast increase of on-line advertising

A three-fold strategyA three-fold strategy

14

93,2

26,9

-14,1-22,9

101,2

29,2

-12,1-19,4

-40,0

-20,0

0,0

20,0

40,0

60,0

80,0

100,0

120,0

Gross Margin EBITDA EBIT Net Result*

EUR

ml

1Q2005 1Q2006

1Q06 results: sharp improvement in profitability and indirect cost reduction

+9%

+9%

+14%

Growth in profitability – Q106 vs Q105 Indirect cost as a % of sales

13%16%

8%

16%14%

6%

0%

5%

10%

15%

20%

Marketing Personnel G&A1Q20051Q2006

Personnel and G&A costs decrease by 4 percentage points over revenues YoY

+15%

* Net Result is gross of discontinuing operations’ result

15

Financial structure: new financing improves maturity profile and capital ratios

Long Term debt 90 50m Silver Point due ‘08 260 New Silver Point Financing 170 ml

Short Term debt 243.2 213.4m equity-linked bonds 29.8 Repayment of 213.4m E-L Bonds

Leasings 31.5 31.5

Gross debt 364.7 321.3

Cash & other assets 51.1 87.7

Net debt 313.6 233.6

Net Worth 289 369 Assumes 80 ml capital increase

Net debt/equity 1.0X 0.6XNet debt/ LTMEBITDA** 2.6X 1.9X

* Assumes new €170 ml debt financing by Silver Point and €80ml capital increase to be underwritten by the Equity-Linked Bondholders** Last twelve months’ EBITDA

31st March 06 Actual 31st March 06 Pro-forma

16

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.