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Creating the leading pan-European internet network company

Creating the leading pan-European internet network company. Presentation 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. Presentation order.

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Creating the leading pan-European internet network company

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  1. Creating the leading pan-European internet network company Presentation to analysts7 September 2000

  2. Key management team Renato Soru Chairman and Chief Executive Tiscali James Kinsella Chairman World Online Massimo Cristofori Finance Director Tiscali 0080474l.ppt

  3. Presentation order Key investment highlights Background and strategic vision Overview of the new group Benefits of the combination Pro forma data Summary 0080474l.ppt

  4. 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 0080474l.ppt

  5. Background and strategic vision Deregulation Disruptive new technologies Emergence of the networked market A pan-European internet network companygenerating multiple revenue streams through theprovision of content and services across all devices 0080474l.ppt

  6. New telco company • Voice • Access • Business services Media aggregator and distributor • Content distribution services • Advertising New retailing platform • Vortals, e.g.: • finance • travel • Partnerships Strategic vision N e t w o r k Customers A unified network with the largest European customer base providing new telco, media and retailing products and services 0080474l.ppt

  7. Overview of the new group The largest pan-European subscriber base • Largest pan-European footprint covering 15 countries • Top 3 positions in 5 countries (by subscribers) • Largest pan-European internet community with 6.1m registered subscribers (3.5m active) • Second largest subscriber basein Europe Sweden Norway Denmark UK Neth. Germany Belgium Lux. Czech Austria Switz. France Italy Spain 0080474l.ppt

  8. Existing network New network planned 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 0080474l.ppt

  9. Overview of the new group A full service provider Key: P = application pending 0080474l.ppt

  10. Benefits of the combination • Establishing a single communication platform for the people of Europewith a full range of services • Ease of use and “always home”wherever you are in Europe Customers • Superior positioning for convergence • “Must-buy” network for advertisers ande-commerce partners • Strong platform for further consolidation Company • Depth of talent and management experience • Significant revenue and cost synergies • Faster break-even • Financial strength Investors 0080474l.ppt

  11. Unified messaging Voice services Streaming UMTS Advertising Superior positioning for convergence Combined IP based unified network Fixed Mobile PC TV Broadband 0080474l.ppt

  12. Significant revenue synergies • Enhanced ability to provide and bundle new converged services • Captures greater proportion of interconnect revenues • Improves business services Pan-European IP network operator • Single brand generates more customers • Leverage best content, applications and business services across the new group Single brand and customer proposition • “Must-have” network for advertisers, key content and e-commerce providers Superior scale and profile • MVNO and UMTS services Andala relationship 0080474l.ppt

  13. Significant cost savings Total net cash saving Recurring savings • Comprising • opex of €280–300 million • network capex of €300–330 million • less one-off cash costs of around €30 million • Operating cost savings equivalent to approximately €150 million pre-tax saving on an annualised, ongoing basis Indicative breakdown Total net cash savings of approximately €550–600 million over the first two full years Total approx. e150m 0080474l.ppt

  14. Depth of combined management Proven leadership and experience • Renato Soru Executive Chairman • James Kinsella Chief Executive Officer • Massimo Cristofori Chief Financial Officer • Simon Duffy Mergers and acquisitions • Paolo Susnik (Technology) • Salvatore Pulvirenti (Technology) • Paola Mastromarino (Technology) • Mario Mariani (Marketing) • Laurent Grimaldi (Network) • Klaus Landefeld (Network) • Bob McNeal (Strategy) • Martin Stever (Advertising) • Debby Fry Wilson (Communications) • Peter Randall (Operations) Depth of talent and expertise 0080474l.ppt

  15. Pro forma data 6 months to 30 June 2000 Pro forma(em) Tiscali World Onlinecombined Revenue 69 96 165 EBITDA (17) (179) (196) Net cash (at 30 June 2000) 9 1,569 1,578 Internet minutes (in June 2000) 612m 1,050m 1,662m Subscribers - registered 2.3m 3.8m 6.1m - active 1.1m2.4m3.5m • Pro forma market capitalisation – e12.5 billion • Targeting EBITDA positive during H2 2001 0080474l.ppt

  16. Pro forma combined revenue Sources of revenue for the combined group Estimated by 2002 Pro forma for 6 monthsto 30 June 2000 0080474l.ppt

  17. Structure • Tiscali shares1 to the value of e20 per share for each World Online share within collar • Asymmetric collar: - 11% / +7.5% Ownership2 • 56.7% Tiscali shareholders (35.5% Renato Soru) • 43.3% World Online shareholders (18.3% Sandoz Foundation) Governance • 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 Irrevocables • World Online: Sandoz Foundation and Reggeborgh, equivalent to 54% • Tiscali: Renato Soru, equivalent to 63% Transaction structure—key terms • Sandoz Foundation, 9 months • Renato Soru, 9 months (subject to minor exemptions) Lock-ups 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 0080474l.ppt

  18. Expected transaction timetable 7 September Public announcement Text Mid/late October Text Offer Memorandum posted and Offer period starts Mid November Tiscali EGM to approve capital increase Text Mid/late November Text First closing date Mid/late November Text Italian court approval of Tiscali’s EGM resolution Text 0080474l.ppt

  19. 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 0080474l.ppt

  20. Q&A 0080474l.ppt

  21. 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. 0080474l.ppt

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