G E S T E V I S I Ó N T E L E C I N C O S. A. 2nd March 2006 ANALYST PRESENTATION 1
INTERNATIONAL FINANCIAL REPORTING STANDARDS The consolidated financial results for the twelve months of 2005 are presented in accordance with International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS), valid at December 31 st 2005. The combined results for the twelve months of 2004, included for comparative purposes, are also presented in accordance with IFRS and IAS. The combined format includes the results for Publiespaña and Subsidiary Companies, while the consolidated format only includes the second, third and fourth quarter of 2004, after Gestevisión Telecinco took full ownership of Publiespaña. Therefore, the consolidated format excludes Publiespaña and Subsidiary Companies results for the first quarter of 2004. 2
G E S T E V I S I Ó N T E L E C I N C O S.A. BROADCASTING PAOLO VASILE, CEO
We have said... About the audience share About the Programming About the Cost Control About delivering Results About shareholders satisfaction BROADCASTING 4
Leadership in Audience Share, 2005 Audience share 24h, Total Individuals 32.6 29.8 20.8 16.5 14.7 21.4 21.1 15.6 27.6 27.6 25.7 26.0 19.0 18.5 15.2 15.4 26.9 25.0 20.2 15.4 25.2 22.9 21.7 16.9 25.6 22.8 20.4 16.6 24.9 22.8 21.0 16.4 24.5 22.3 21.5 16.9 24.8 24.7 23.4 22.1 21,0 20.2 20.2 21.4 21.4 20.4 19.5 20.8 17.0 17.7 18.2 17.4 22.3 21.3 19.6 17.3 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Telecinco Antena 3 TVE1 FORTA Telecinco consolidates its leadership and reaches again its historical maximum BROADCASTING 5
Leaderhip in Audience Share, 2005 Audience share 24h, Total Individuals 21.1 22.6 22.1 21.3 22.8 19.8 18.1 19.1 18.4 18.9 18.4 22.7 19.4 18.2 23.6 20.8 20.2 20.2 20.6 18,8 17,9 22.3 22.6 20,1 21.0 17,3 17,0 20.8 22,0 19,2 19,5 19,3 17,5 22.6 22.7 21.5 21.9 16,8 16,6 21.2 21.8 20,5 20,5 22.7 20.9 19,5 16,0 15,9 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dic Telecinco Antena 3 TVE1 FORTA Telecinco has been the leading channel nine out of twelve months in 2005 BROADCASTING 6
Leaderhip in Audience Share, 2005 200 120 41 5 32.9 54.8 11.2 Telecinco has been the leading channel 200 days in 2005 BROADCASTING 7
Leadership in Audience Share, 2005 Audience share PRIME TIME (21:00-0:00), Total Individuals 32,7 31,2 22,2 17,2 13,3 23,3 18,8 15,7 28,8 25,0 19,1 15,4 28,1 24,7 19,6 16,2 27,0 24,6 21,1 16,2 25,3 22,9 21,4 17,8 25,6 22,8 20,5 17,3 23,3 21,9 22,1 18,1 24,3 22,4 20,8 18,1 26,4 24,4 20,9 20,6 19,8 18,6 18,2 17,6 23,9 23,1 22,3 21,4 21,2 18,6 18,3 17,4 23,5 21,8 19,5 17,2 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Telecinco Antena 3 TVE1 FORTA Telecinco reaches in 2005 its best Prime Time audience rating BROADCASTING 8
Leadership in Prime Time 2005 Total Individuals (2005, January 1 st - December 31 st ) 24.4 26.4 27.2 27.0 23.3 22.0 26.8 22.3 20.4 31.3 18.7 20.1 21.1 17.7 23.0 15.7 15.4 21.3 18.3 16.3 19.1 (Time Slot: 22:00-0:00) Telecinco s prime time programmes continue to deliver strong audience shares all throughout the week BROADCASTING 9
Leadership in Day Time 2005 Audience share Day Time, Total Individuals 21.7 19.6 21.0 17.4 12.1 6.1 1.3 0.8 Resto Diff. Vs. 2004 0.0-1.8 0.4-0.1-1.1-0.5 0.8 2.2 Telecinco is undisputed leader in Day Time BROADCASTING 10
Leadership in Commercial Target 2005 Audience share 24h, Comercial Target* 24.7 22.2 16.3 14.9 13.9 5.5 1.6 1.0 Resto Diff. vs. 2004-0.6-1.9 0.8-0.4-1.0-0.7 1.0 2.9 * Comercial Target = Audience group comprising individuals from 16 to 59 living in cities over 10.000 inhabitants and across medium and upper social classes Telecinco is undisputed leader in Commercial Target BROADCASTING 11
Best Audience Ratings in all Time Slots, 2005 Audience share in % for 2005 1 FÓRMULA 1 47.6 11 GRAN HERMANO:LA CASA EN DIRECTO 28.1 2 OPERACION TRIUNFO 37.4 12 KARLOS ARGUIÑANO EN TU COCINA 27.9 3 OPERACION TRIUNFO:EL CHAT 36.4 13 GRAN HERMANO VII 27.1 4 GRAN HERMANO:EL DEBAT 32.9 14 LA CASA DE TU VIDA 27.0 5 HOSPITAL CENTRAL 30.9 15 C.S.I. LAS VEGAS 26.4 6 LOS SERRANO 30.7 16 MOTIVOS PERSONALES 26.3 7 AIDA 30.6 17 EL COMISARIO 26.0 8 CRONICAS MARCIANAS 29.1 18 GRAN HERMANO VIP 2 25.7 9 7 VIDAS 28.7 19 EL PROGRAMA DE ANA ROSA 25.5 10 GRAN HERMANO VIP 2:EL DEBATE 28.5 20 C.S.I.MIAMI 25.4 12
Optimal Programming Mix In-house Production vs. Third-Party Rights 32% 30% 23% 19% 68% 70% 77% 81% 2002 2003 2004 2005 In-house Production Third-Party Rights Telecinco increases in-house production to optimise business model BROADCASTING 13
... As Film Ratings Fall... 143 71 81 78 39 60 53 36 RATINGS 38 16 14 4 4 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: SOFRES The number of films that achieve an audience share above 30% in Prime Time decreases while film costs increase BROADCASTING 14
Control on Operating Costs Total Operating Costs, million + 3.9% + 3.6% + 3.7% 449.120 465.990 482.789 498.444 517.848 2002 2003 2004 2004 2005 Spanish GAAP IFRS BROADCASTING 15
Our assets... 16
Our assets... 17
The Evolution, a Multichannel Platform Analog Broadcasting + Teletext DTT MPEG-2 MHP Internet ADSL Podcasting Digital Platform TELECINCO Mobil UMTS (3G) WAP DVB-H Cable Satellite TV via ADSL TL5 has developed a digital multi-channel platform to take advantage of all opportunities arising from the implementation of DTT in Spain 18
In the best Shape to face new Challenges New DTT Channels : 3 DTT Channels : 6 DTT Channels : 3 DTT Channels : 3 DTT Channels : 2 DTT Channels : 2 DTT Channels La Sexta: 2 DTT Channels Simulcast Analog Switch-Off : 1 Multiplex : 2 Multiplex : 1 Multiplex : 1 Multiplex : 1 Multiplex : 1 Multiplex La Sexta: 1 Multiplex 1990................. 7- Nov-2005 30- Nov-2005 2006 For one of the channels will continue to be the simulcast channel April 2010 La Sexta: Low Coverage TL5 started broadcasting 2 new DTT channels at the end of 2005 19
G e s t e v i s i ó n T e l e c i n c o S. A. BROADCASTING ADVERTISING GIUSEPPE TRINGALI, CEO
Taking Advantage of a growing Advertising Market +8,1% +10,2% +4,3% Fuente; Infoadex +12,9% +4,1% +27,7% +5,3% 04 05 04 05 04 05 04 05 04 05 04 05 04 05 TTM TV M. IMPRESOS RADIO EXTERIOR INTERNET CINE 10 ADVERTISING 21
Leadership in Spanish TV Advertising Market 778 903 725 705 701 835 +16.0% -2.8% +19.2% 368 381 3.5% +1.8% 39 40 0 14 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 TELECINCO TVE Antena 3 FORTA Canal + 2004 2005 Cuatro Source: InfoAdex ADVERTISING 22
Leadership in Advertising Market Telecinco Gross Advertising Revenues (mill ) + 15.8% 901.07 Special Initiatives (mill ) 14.3 % 2005 85.7 % 777.86 + 22.2% 129.24 105.67 2004 2005 2004 2005 Record advertising revenues have been reached in 2005, with Special Initiatives growing at a high rate, making 14.3% of total revenues ADVERTISING 23
Innovative Commercial Strategy Audience SHARE SECONDS GRP s (20 ) C/GRP s (20 ) Telecinco Revenues % (%) (%) (%) (%) mill (%) 22.3% +0.9% -1.5% -0.1% +15.9% 901.07 15.8% Price increase is the main revenue driver, while ad volumes (seconds) are reduced Publiespaña consolidates its price leadership Source: TNS and Publiespaña ADVERTISING 24
Leadership in converting Audience into Advertising Revenues Audience 2005 24h total individuals (%) 17.3 13.7 21.3 5.8 22.3 19.6 28.7 11.9 5.1 GRPs 2005 (%) 1.4 23.4 29.5 TV Advertising Revenues 2005 (%) 29.0 13.2 1.9 6.1 18.4 31.4 Telecinco TVE1 La 2 Antena 3 FORTA Other Source: TNS 24 Hours, total individuals (4+ years total Spain), Infoadex, Publiespaña estimates for split between TVE1 and La 2 ADVERTISING 25
Maximising Advertising Revenues, by Sectors Sector Breakdown (% on total Adv sales) Sector Growth (2005 vs. 2004) Others Food Finance +35.5% Retail 5,6% 15,1% Automotive 24,0% 21,5% 2005 17,3% 10,5% 5,9% Non Food Telecoms Food Non Food Automotive Retail +65.1% +8.8% +6.1% +18.4% +24.3% Telecom Finance Other +9.2% Source: Publiespana ADVERTISING 26
Meeting our Strategic Commitments Leadership in advertising revenues: 902.6 million (Infoadex) Leadership in advertising share: 31.4% Leadership in prices: Premium Price : +6.3% above average TV Leadership in power ratio: 1.41 ADVERTISING 27
G e s t e v i s i ó n T e l e c i n c o S. A. BROADCASTING FINANCIALS MASSIMO MUSOLINO General Manager Operations
Consolidated Financial Results, IFRS ( million) 2005 2004* Var. % Total Net Revenues 931.105 793.379 17.4 % Total Costs (517.848) (498.444) 3.9 % Personnel (75.092) (70.857) 6.0 % Operating Costs (280.951) (264.830) 6.1 % Amortisation & Depreciation (161.805) (162.757) (0.6%) EBIT 413.258 294.935 40.1 % Pre-tax Profit 421.464 301.766 39.7 % NET PROFIT after Minorities 290.332 214.207 35.5 % EBITDA (1) 423.260 300.530 40.8 % (1) Post-rights amortisation EBITDA/NET REVENUES EBIT/NET REVENUES NET PROFIT/NET REVENUES 45.5 % 44.4 % 31.2 % 37.9 % 37.2 % 27.0 % - - - * Combined format for FY2004 FINANCIALS 29
Obtaining Record Operating Margins EBITDA*/NET REVENUES (in %) 34.9 56.0 45.1 45.9 45.5 42.6 38.7 37.9 31.4 27.1 1Q 2Q 3Q 4Q FY 2004 2005 Operating margins have increased in every quarter of 2005 * Post-rights amortisation FINANCIALS 30
Obtaining Record Operating Margins ( million) + 22.8% 789.88 793.38 +17,4% 931.11 643.23 + 3.6% +3,9% 465.99 482.79 498.44 517.85 2003 2004 Spanish GAAP Total Revenues 2004 EBIT/NET REVENUES 37.2% (vs. 27.2% in 2003) EBITDA*/NET REVENUES 37.9% (vs. 30.0% in 2003) 2004 2005 IFRS Total Costs 2005 EBIT/NET REVENUES 44,4% EBITDA*/NET REVENUES 45,5% * Post-rights amortisation FINANCIALS 31
Consolidated Cash Flow Statement, IFRS ( million) 2005 2004* Diff. In million Initial Net Financial Position 244.35 252.53 (8.18) Free Cash Flow 307.30 241.34 65.96 Cash Flow from Operations 464.43 401.96 62.47 Net Investments (163.49) (150.58) (12.91) Change in Net Working Capital 6.36 (10.04) 16.40 Change in Equity (24.63) (0.19) (24.44) Financial Investments 0.37 (0.23) 0.60 Dividends received 1.07 0.90 0.17 Dividend payments (172.64) (250.00) 77.36 Total Net Cash Flow 111.47 (8.18) 119.65 Final Net Financial Position 355.82 244.35 111.47 Free Cash Flow/Total Net Revenues 33.0% 30.4% * Combined format for 2004 FINANCIALS 32
Creating Shareholders Value Strong Cash Generation Acc. 2000-2005* ( million) 350 FCF 1,020 ( million) 300 250 200 150 100 Net Profit Ordinary Dividend 980 738 50 0 2000 2001 2002 2003 2004 2005 Optimised business model which converts Net Profit into FCF High FCF growth combined with high dividend yield Immediate Shareholder Return * Spanish GAAP for 2000-2004 and 2005 IFRS FINANCIALS 33
Creating Shareholders Value PAY-OUT DIVIDEND YIELD 06 DIVIDEND ON 2005 NET PROFIT 100 % 5.8 % (1) 05 DIVIDEND ON 2004 NET PROFIT 80 % 4.2 % (2) COMMITMENT IPO PROSPECTUS 50 % 5.8 % (1) Based on stock price at March 1st 2006 (2) Based on stock price at March 1st 2005 Increasing Pay-Out to guarantee an excellent Dividend Yield * Post-rights amortisation FINANCIALS 34
Net Investments 163.49 million 150.58 million 9.67 10.20 1.90 33.33 68.90 2005 50.13 2004 69.58 70.36 TV Rights non-fiction TV Rights Fiction Co-production Distribution Tangible & Intangible Fixed Assets FINANCIALS 35
TELECINCO Back up Slides 1. Consolidated Financial Statements FINANCIALS 36
Consolidated Profit & Loss Account (I) ( million) IFRS FY05 FY04* %05/04 Gross Adv. Revenues -Telecinco -Other Discounts Net Advertising Revenues Other revenues 909.979 901.069 8.910 (39.034) 870.945 60.160 786.708 777.855 8.853 (48.332) 738.376 55.004 15.7% 15.8% 0.6% (19.2%) 18.0% 9.4% TOTAL NET REVENUES 931.105 793.379 17.4% Personnel Rights Amortisation Other Operating Costs (75.092) (151.802) (280.951) (70.857) (157.162) (264.830) 6.0% (3.4%) 6.1% EBITDA adj ** 423.260 300.530 40.8% * Combined format for FY2004, ** Post-rights amortisation FINANCIALS 37
Consolidated Profit & Loss Account (II) IFRS ( million) 2005 2004* %05/04 EBITDA adj** 423.260 300.530 40.8% Other Amortisation & Depreciation (10.003) (5.595) 78.8% EBIT 413.258 294.935 40.1% Equity Consolidated Results (186) 835 ------ Financial Results 8.393 5.997 40.0% EBT 421.464 301.766 39.7% Income Taxes (131.067) (87.539) 49.7% Minority Interests (65) 20 ------ Net Profit 290.332 214.207 35.5% * Combined format for 2004, ** Post-rights amortisation FINANCIALS 38
Consolidated Balance Sheet, IFRS ( ml.) Tangible assets Audiovisual Rights and Pre-payments 2005 2004 65.21 233.94 69.50 232.91 - Third Party Rights - Fiction TV Rights - Co-production / distribution 160.28 23.44 50.22 184.36 27.85 20.70 Pre-paid taxes TOTAL NON-CURRENT ASSETS Current assets Financial investments and cash TOTAL CURRENT ASSETS TOTAL ASSETS Shareholders equity Non-current Provisions Non-current payables Non-current financial liabilities TOTAL NON-CURRENT LIABILITIES Current Payables Current financial liabilities TOTAL CURRENT LIABILITIES TOTAL LIABILITIES 19.36 318.51 214.53 360.28 574.81 893.32 571.15 71.25 1.45 3.31 76.01 245.00 1.16 246.16 893.32 16.78 319.18 184.09 249.03 433.12 752.30 478.09 62.45 0.58 3.57 66.60 206.50 1.11 207.61 752.30 FINANCIALS 39
Revenue Breakdown IFRS ( million) FY05 FY04* %05/04 Gross TV Adv. Revenues 905.953 777.855 16.5% Commisions and Discounts (39.034) (48.332) (19.2%) Net TV Advertising Revenues 866.920 729.523 18.8% Other revenues 64.185 63.856 0.5% TOTAL NET REVENUES 931.105 793.379 17.4% * Combined format for 2004 FINANCIALS 40
TELECINCO Back up Slides 2. Audience Share BROADCASTING 41
Spanish TV Audience Share 24 Hours, All Individuals 24,9 24,5 24,8 24,7 22,8 21,1 22,3 21,5 21,0 20,4 20,2 20,2 23,4 21,4 19,5 22,1 21,4 20,8 22,3 21,3 19,6 22,3 21,2 19,5 18,2 21,5 20,8 19,1 16,4 16,9 17,0 17,7 18,2 17,4 17,3 16,4 1999 2000 2001 2002 2003 2004 2005 Jan-Feb 2005 Jan-Feb 2006 Telecinco is undisputed leader, outperforming A3TV and TVE1 Source: Sofres, 24 hours, Individuals (4+ years) BROADCASTING 42
Spanish TV Audience Share 24 Hours, Commercial Target 23,5 23,2 20,3 25,0 23,9 23,0 22,1 19,7 19,9 25,3 24,3 23,4 21,3 21,4 21,2 20,5 19,8 24,7 22,2 24,5 21,7 22,9 22,1 18,2 15,9 15,8 15,1 15,8 16,5 15,0 16,3 14,9 16,8 15,9 15,4 14,1 1999 2000 2001 2002 2003 2004 2005 Jan-Feb 2005 Jan-Feb 2006 In commercial target Telecinco maintains a wide gap with competitors Source: Sofres, 24 hours, Commercial target (13-54 years) BROADCASTING 43
Spanish TV Audience Prime Time (21:00), All Individuals 26,4 23,3 22,1 24,3 24,4 22,4 21,9 20,8 19,8 20,9 18,1 18,1 18,2 23,9 22,3 20,6 18,6 18,6 18,3 17,6 23,1 23,5 21,4 21,8 21,2 17,4 19,5 17,2 23,4 22,3 19,4 17,9 21,6 20,9 18,6 16,9 1999 2000 2001 2002 2003 2004 2005 Jan-Feb 2005 Jan-Feb 2006 In prime time, Telecinco continues strengthening its leadership Source: Sofres, Prime Time individuals (4+ years) BROADCASTING 44
Spanish TV Audience Prime Time (21:00), Commercial Target 25,1 26,1 24,8 24,3 25,8 26,6 26,2 25,7 21,5 19,4 17,5 19,8 21,4 16,8 19,8 20,7 16,1 19,0 15,8 22,9 21,8 20,4 19,1 18,0 16,9 15,8 22,7 16,4 15,3 22,9 17,0 16,1 23,5 22,2 15,1 14,7 1999 2000 2001 2002 2003 2004 2005 Jan-Feb 2005 Jan-Feb 2006 Telecinco maintains its undisputed leadership, far ahead of competitors Source: Sofres, Prime time, Commercial Target (13-54 years) BROADCASTING 45
Spanish TV Audience Day Time, All Individuals 25,6 23,1 24,6 24,9 24,0 23,2 20,6 15,6 22,2 21,9 21,0 20,9 21,0 21,7 21,4 20,7 20,6 20,1 19,9 16,4 16,5 17,8 18,2 17,5 21,7 21,0 19,6 17,4 21,9 20,7 19,5 18,3 21,5 20,7 19,3 16,2 1999 2000 2001 2002 2003 2004 2005 Jan-Feb 2005 Jan-Feb 2006 Telecinco maintain its performance in day time Source: Sofres, Prime time, Commercial Target (13-54 years) BROADCASTING 46
Spanish TV Audience Day Time, Commercial Target 23,9 22,7 20,7 24,5 23,5 23,7 22,7 19,7 19,9 23,0 22,7 19,7 23,7 21,5 24,7 21,2 24,0 22,0 24,0 21,2 22,7 22,1 15,1 15,4 14,7 15,4 18,8 16,0 18,3 15,0 16,3 16,7 15,8 15,5 13,7 1999 2000 2001 2002 2003 2004 2005 Jan-Feb 2005 Jan-Feb 2006 Telecinco maintains its leadership in commercial target Source: Sofres, Prime time, Commercial Target (13-54 years) BROADCASTING 47
TELECINCO Back up Slides 3. Advertising Revenues ADVERTISING 48
Leadership in Advertising, Quarter by Quarter Gross Advertising Revenues Telecinco (mill ) 290.45 + 27.1 % vs. 2Q04 249.84 206.54 + 20.1 % vs. 1Q04 154.24 + 13.7 % vs. 3Q04 + 3.3 % vs. 4Q04 182.244 253.185 134.929 216.311 Special IIEE Initiatives 24.300 37.260 19.310 33.530 1Q05 2Q05 3Q05 4Q05 High growth has been achieved quarter by quarter ADVERTISING 49
DISCLAIMER Statements contained in this document, particularly the ones regarding any Telecinco possible or assumed future performance, are or may be forward looking statements and in this respect they involve some risks and uncertainties. Telecinco 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 Telecinco shall not be taken as an indication of future performance. The content of this document is not, and shall not be considered as, an offer document or an offer or solicitation to buy or sell any stock. 50
G e s t e v i s i ó n T e l e c i n c o S. A. BROADCASTING March 2nd 2006 www.inversores.telecinco.es