Iliad 2004 Results Announcement

Iliad 2004 Results Announcement

2004 Key Events Financial performance Profitable growth stronger in 2004 2004 Revenues up 68% 2004 EBITDA up 103% 2004 Net income up 21% Operating performance ADSL subscribers growth stronger than announced 1 million subscribers reached in December 2004 instead of June 2005 Freebox technology unmatched Canal + broadcast agreement signed 2

Pursuing Growth and Profitability In 000 FY 2003 FY 2004 Var. Revenues 293,051 491,446 +67.7% EBITDA 53,643 108,672 +102.6% EBIT 34,967 53,090 +51.8% Income before Tax 33,830 60,739 +79.5% Net Income 33,875 40,832 +20.5% 3

Internet Sector

Freebox: The Only Integrated Triple-Play Offer in France 747,700 Freebox Users 600,000 Phone Users 75,000 Subscriptions (Canal+, CanalSat and Paying Channels) 29. 99 /month Dec. 2003 Dec. 2004 Number of Freebox installed 100,000 747,700 % of Total ADSL Subscribers 21% 70% Total ADSL Subscribers 485,000 1,064,000 5

Free: Broadband Innovation for the French Residential Market Introduction of ADSL 2+ Launch of 1 st ADSL 2+ platform during 3 rd quarter 2004 20 Mbps bandwidth ADSL 2+ transitioning 100% of DSLAMs by end 2005 100% of Freebox since September 2004 Launch of Canal + and Canalsatelitte Broadcast Integration of best TV premium package available Testimony to Freebox / DSLAMs security and anti-piracy features Proof of Freebox TV service quality HDTV Live test with France Télévisions in November 2004 6

Focus on ADSL 2+ Technology ADSL2+ Doubles the Maximum Data Rate 30 25 20 15 ADSL 2+ ADSL 10 5 0 1 2 3 4 Loop Length (KMS) 16% 23% 20% 15% 4% 10% 7% 5% 1 2 3 4 Free Subscribers Distribution 7

Focus on Canal + Partnership and HDTV Broadcasting Canal + / CanalSat : A Balanced Partnership HDTV on ADSL 2+ Subscription ADSL2+ Network ADSL2+ Network 11.00 Canal + CanalSat 29.99 HDTV 1 Box 1 Remote Control 2 Contracts / 2 Bills 8

Free: Delivering Reliable Subscriber Growth Management is focused on delivering absolute growth and a target market share of 17 to 20% by 2007 2004 was 2 nd of 3 critical years in market share grab Churn remained low throughout the year 150,000 155,000 140,000 133,000 1Q 2004 2Q 2004 3Q 2004 4Q 2004 9

Free: Leading Alternative ADSL Operator in a Fast Growing Market In subscribers million 6.1 Telecom Italia Club-Internet Cegetel Tele2 Tiscali 3.2 15% 1.4 7% 54% 73% 17% 47% 9Telecom AOL Free Wanadoo Dec. 2002 Dec. 2003 Dec. 2004 Source: France Télécom (Excl. TurboDSL), Companies 10

Competition: Free s Single Offer as a Marketing Strategy 45 39. 90 /512K 35. 90 /8Mbs + Voice 31. 95 /512K 29. 99 VOICE over Freebox TV over Freebox 20Mbps ADSL2+ CANAL+ on Freebox 29. 99 24. 95 /512K 19. 85 /1MB Dec. 2002 Jun. 2003 Dec. 2003 Jun. 2004 Dec. 2004 11

March 2005: ADSL Market Overview The best premium offers in unbundled areas: Monthly Line Rental None 14.00 14.00 7.00 14.00 Monthly Charge 29.99 59.90 22.90 36.90 36.90 Bandwidth 20 Mbps 8 Mbps 5 Mbps 8 Mbps 8 Mbps Telephony offer Free unlimited local and National calls Free unlimited Local and National Calls Not available Free unlimited Local and National Calls Free unlimited Local and National Calls TV Offer 90 Free TV channels No TV No TV 40 Free TV channels No TV CPE Available at no cost 3.00 per month 59.99 2.00 per month 30.00 Total Monthly Cost 29.99 76.90 36.90 45.90 50.90 Triple Play Dual Play Internet Only Triple Play Dual Play Source: Websites, companies, excluding temporary promotional offers 12

March 2005: ADSL Market Overview The cheapest offers in unbundled areas: Monthly Line Rental None 14.00 14.00 14.00 14.00 Monthly Charge 29.99 25.90 22.90 24.90 26.90 Bandwidth 20Mbps 512 Kbps 1 Mbps 8 Mbps 8 Mbps Telephony offer Free Local and National Calls Not available Not available Not available Not available TV Offer 90 Free TV Channels Not available Not available Not available Not available CPE Available at no cost 30.00 59.99 2.00 per month 30.00 Total Monthly Cost 29.99 38.90 36.90 40.90 40.90 Triple Play Internet Only Internet Only Internet Only Internet Only Source: Websites, companies, excluding temporary promotional offers 13

Free: Efficient Marketing Strategy Free s offer attractivity remained the strongest in 2004 109.6 1,158 87.8 84.3 340 244 38.6 177 38.5 120 17.0 579 Wanadoo Neuf Cegetel AOL Tele2 Free Source: Secodip, TNS Sofres Gross Marketing Expenses ( millions) Net adds 14

Network Extension: Reaching Further Fibre-optic network build out A total of 17,000 kms / 10,000 kms added in 2004 Central Office reach expanded from 162 to 410 COs in 2004 Additional 150 COs to be connected by summer 2005 (to 560) A clear extension path until end 2006 250 new COs Fiber IRUs signed with 24 local authorities 45,000 subscribers to be unbundled, based on December 31, 2004 15

Unbundling as a Core Strategy 1,064,000 Number of FT Sites Connected (Number of Subscribers) 99,100 3.3% 33.6% 163,000 53.2% 485,000 566,000 52 162 410 3,300 Dec. 2002 Dec. 2003 Dec. 2004 Dec. 2002 Dec. 2003 Dec. 2004 16

Telephony Sector

OneTel: Accelerating Subscribers Growth in 2004 Increased marketing budget fuelled subscribers' acquisition 335,000 215,000 Dec. 2003 Dec. 2004 Focus on improving billing (Direct Debit) and decreasing unpaid ratio 2005 should be a year of consolidation 18

Kertel: Clear Contribution to the Group Constant increase of prepaid cards sales 3.3 3.5 2.7 1.6 H1 03 H2 03 H1 04 H2 04 First Used Cards La Poste partnership stronger in 2004: Kertel cards available in 100% post offices since H2 04 19

Financials

Delivering Growth and Profitability In 000 FY 2003 FY 2004 Var. Revenues 293,051 491,446 +67.7% EBITDA 53,643 108,672 +102.6% EBITDA Margin 18.3% 22.1% - EBIT 34,967 53,090 +51.8% Income before Tax 33,830 60,739 +79.5% Net Income 33,875 40,832 +20.5% 21

Internet Sector Accounting for Growing Part of Revenues and Margin In million REVENUES EBITDA 491.4 13.4 293.0 17.7 147.3 108.7 2.4 23.8 92.9 182.3 330.8 53.6 6.5 18.0 29.2 82.5 2003 2004 2003 2004 Internet Sector Telephony Sector Other 22

Group EBITDA Margin Improvement In million EBITDA 18.3% 22.1% 108.7 EBITDA growing by 102.6% year-on-year Positive impact from Internet sector and growing unbundled customers ratio Margin pressure from telephony and other sector 53.6 2003 2004 23

Internet Sector: Iliad s Growth Engine A stable pricing structure in ADSL ensures revenue growth in line with subscriber growth In million Access Revenues Hosting and Advertising Intersegment and other 2003 177.1 4.7 33.2 215.0 2004 322.2 6.3 65.5 394.0 Access revenues up 82% at 322.2 million Of which 70% ADSL linked Of which 13.5 million from Freebox TV and Voice services 24

Internet Sector: EBITDA and EBIT Margin Improvement In million EBITDA EBIT 24.9% 8.5% 16.0% 6.4% X 2.8 82.5 X 2.5 28.3 29.2 11.7 2003 2004 2003 2004 % of revenues excluding intersegment 25

Internet Sector: 2004 Financial/Accounting Changes DSLAM depreciation period shortened to 3 years Universal Service charge based on 0.43% of telecom revenues Net impact on 2004 EBITDA: 1.4 million Application of 5.5% reduced VAT rate on audiovisual revenues 56% of unbundled subscribers revenues (equipped with freebox) Paying channels and options 26

Telephony: Strong Revenue Growth, EBITDA Commitment Kept REVENUES EBITDA 163.0 39.5 19.4% 16.2% 96.4 21 123.5 18 23.8 75.5 2003 2004 2003 2004 Fixed Telephony and Prepaid Cards Other 27

From EBITDA to Net Income In 000 2003 2004 Var. EBITDA 53,643 108,672 +102.6% EBIT 34,967 53,090 +51.8% Income before Tax 33,830 60,739 +79.5% Net Income 33,875 40,832 +20.5% Tripling of depreciation charges due to heavy network and customer equipment investments since 2003 Positive financial results from /USD rate improvement and IPO proceeds investment Extraordinary income from: Sale of building: 1.6 million Agreement with Siris: 2.6 million Positive resolution of provisioned FT/Onetel litigation: 1.2 million 28

Significant CapEx in 2004 Peak CapEx year in 2004: 1 million subscribers reached earlier than anticipated Significant part of CapEx linked to FT cabling fees due to migration from Option 5 to Option 1 FT cabling fees reduced from 78.7 to 50 (full ULL) or 55 (partial ULL) from Feb. 2005 Freebox-for-all strategy Transition to ADSL 2+ 29

Cash Flow: Proceeds from the IPO Accelerated Growth In million 1.8 9.4 91.6 39.0 210.7 100.1 12.5 Operating Cash flow WCR Variation IPO Net debt increase Dividends CAPEX Cash Increase 30

Significant CapEx in 2004 Operating cash flow cover growth CapEx, not network NETWORK CapEx GROWTH CapEx OPERATING CASH FLOW 55.8 13.3 9.4 83.9 139.8 139.1 50.3 73.0 Fiber + IRUs FT Rooms Trans. Eq. Total Freebox + DSLAMS FT Cabling Frees Total OPCF 31

A Strong Balance Sheet Structure for the Industry Assets Fixed assets Other current assets Cash and equivalents Liabilities Total shareholders equity Provisions Borrowings Other Liabilities (incl. Accounts Payables)* Total Dec. 31. 2004 278.2 117.8 30.5 178.2 1.5 29.3 217.4 426.5 * Including intangible and tangible assets suppliers 32

Outlook

2005 Outlook Internet ARPU: 29.99 Reach 1.5 million subscribers by end 2005 Expand fiber optic network to reach 1,000 FT sites Free cash-flow break-even during 2005 Propose final 2004 dividend of 11.5 cents at the annual shareholder meeting 34