2004 ANNUAL RESULTS

1
2004 ANNUAL RESULTS
123Multimedia created in 1987
29 March 2005
ê
2000
Minitel
ê
2002
Internet
Audiotex
ê
SMS Premium
Mobile Services
i-modetm
Interactive TV
é
é
MMS JAVA VIDEO
2001
2003
é
Television
2004
2
The 123 Multimedia team

• Patrick Abadie, Chief Executive Officer
• Marie-Line Malaterre, Chief Financial Officer
• Jeremy Prince, Head of Investor Relations
• Mark Frieser, CEO 123 Multimedia USA

3
Contents

• Profile of 123 Multimedia
• The key events of 2004
• The 2004 results
• Future prospects and development strategy
• Stock market information
• Appendices

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PROFILE OF 123MULTIMEDIA
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A leader undergoing strong growth

• European leader on a market with great potential
• 17 years of growth and profitability thanks to
  its experience in creating, marketing and selling
  added-value multimedia services and products
• A well-established position of no. 1 in France
• An international presence, essentially in Europe

6
A leader undergoing strong growth

• A group undergoing strong growth, which is
  profitable and has no debt
• 2004 revenues of 143.2 million (24.8)
• Operating profit of over 20.1 million (33.3)
• Net income of 12.8 million (36)
• No debt

Change in operating profit In millions of euro
Change in revenues In millions of euro
X 2
X 4
7
A fully expanding market
2004-2008 mobile telephone services (western
Europe)
In millions of US dollars
Games
Video
Ring tones
Music
2005
2006
2007
2008
Source IDC - 2004
8
A fully expanding market
Change in multimedia mobile telephone park
(western Europe)
In thousands
2G
3G
2.5G
CSFB - Fatphone 79, Feb. 2004 Source Morgan
Stanley January 2003
9
Ongoing adaptation to changes in its market
B2C product offerings
PRINT MEDIA RADIO BROADCASTING TV
BROADCASTING INTERNET SITES COMMERCIAL
PARTNERSHIPS
Logos
Ring Tones
Ring Back Tones
Games
Integrated technical platform
Information Services
Community Services
Interactive TVMessaging
Java Games
B2B product offerings
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An activity based on optimising the Multimedia
Kiosk Model

• 123Multimedias business model relies on the
  optimisation of the revenue-sharing model, i.e.,
  the Multimedia Kiosk Model
• The Multimedia Kiosk Model involves
• A surcharge invoiced to the consumer directly
  by the telecom operators
• A direct payment collected by the telecom
  operators
• A revenue-sharing framework agreement between
  the telecom operators and 123Multimedia
• A multimedia business model Voice, SMS, MMS,
  and Mobile Internet
• Advantages and benefits of the Multimedia Kiosk
  Model
• It is a secure and proven model
• It is an evolving model
• It is a win-win model (telecom operators-123)

11
Full coverage of the value chain by integrating
the various businesses

• By designing its own proprietary products or
  acquiring licenses, the creative department has
  made it possible to build a catalogue of over
  150,000 products and services
• A multimedia and changing technological platform
• Indisputable know-how in marketing and
  advertising
• Optimisation of billing tools made available by
  telecom operators
• Additional opportunities for international growth

Impact Analysis
Content Creation - In-house - Licensing -
Platform Customisation
Technical Integration Hosting Development
Marketing and Advertising
Invoicing
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The 123Multimedia products
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B2C activity (76 of 2004 revenues)

• Proven expertise in direct sales to the general
  public of value-added multimedia products and
  services thanks to effective advertising
  campaigns

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B2B activity (21 of 2004 revenues)

• Offering
• Use product/marketing know-how in order to offer
  solutions to large accounts
• Advantages
• Larger advertising presence without additional
  investment
• Increase sales volume
• Co-publishing
• Large accounts
• Telecom operators
• Handsets manufacturers
• Media groups (NRJ, M6, RTL, etc.)
• Specialised communications agencies (the Tessi
  group) and major brands

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Multi-Platform Marketing Footprint - Overview

• A marketing approach reflecting 123Multimedia
  business segmentation B2C, B2B2C and B2B

B2B2C Indirect Campaign
B2B Multimedia IT Service Co.
B2C Direct Campaign

• Media partner
• White Label
• Co-edition Multi-platform approach

• Mass Hosting
• Customised development
• Offering of invoicing instruments

• Press
• Radio
• TV
• Internet
• Own campaign

Optimisation of Advertising Campaign Scope
Resources Optimisation and Traffic Aggregation
Direct Impact on Different Target Groups
123Multimedias services are also promoted via
Tchatche TV, which is a driver of distribution
with a high degree of interactivity
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THE KEY EVENTS OF 2004
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2004 our year for acceleration

• Acquisition by Index
• In August 2004, Index acquired 60.6 of
  123Multimedias capital (fully diluted)
• Index
• Japanese leader in multimedia content
• 2004 revenues of 279 million and a market
  capitalisation of 1.6 billion

18
2004 our year for acceleration

• IPO
• In December 2004, 123Multimedia was listed on the
  Euronext Paris index
• The greenshoe option was fully exercised
• Nearly 50 million raised

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THE 2004 RESULTS
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The 2004 results
(1) EBITDA is calculated here by considering only
provisions and depreciation
21
Breakdown of revenues by client, geographic area
and product
Breakdown of revenues by geographic area
Breakdown of revenues by client
143.2 M
(In millions of euro)
(In millions of euro)
3.0
143.2 M
114.8 M
21.0
114.8 M
21.2
1.6
21,2
95.4 M
95.4 M
0.4
28.4
75.5 M
31.9
31,9
29.9
75.5 M
0.7
24.1
24,1
78.8
76.0
40.9
25.6
25,6
78,8
68.1
70.0
69.7
68,1
75.9
74.4
58.5
75,9
74,4
Breakdown of revenues by product
143.2 M
(In millions of euro)
5.2 M
2.3 M
114.8 M
21.2
2.7 M
95.4 M
1.1 M
94.3 M
94,3 M
1.8 M
75.5 M
3.9 M
79.1 M
1.6M
79,1 M
78.8
2.4M
58.7 M
58,7 M
35.9M
41.4 M
31.9 M
31.0 M
35.6M
41,4 M
31,9 M
31,0 M
22
Summary consolidated cash flow
23
The 2004 results

• Balance sheet

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FUTURE PROSPECTS AND DEVELOPMENT STRATEGY
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PRODUCT STRATEGY

• 123Multimedia intends to pursue its creative
  efforts and its acquisition of relevant licences
  in order to keep the most extensive European
  catalogue (over 150,000 value-added products and
  services to date) at the cutting edge
• 123Multimedia is positioning itself in
  anticipation of future changes
• By optimising the synergies created by the
  increasing convergence of the various media
• By using its audiovisual expertise to meet the
  increasing demand for such content for mobiles
  due to the 2.5G and 3G expansions.
• By expanding its catalogue of games and Java
  applications.
• By using its expertise in the field of chats and
  strong user communities to participate in the
  growth of mobile telephone community services
  (Mobile Instant Messaging, blogs, chat Mobile
  Internet and SMS).
• By benefiting from the convergence of land lines
  and mobile telephones set up by the telecom
  operators and manufacturers, thereby enlarging
  the target population.
• 123Multimedia will benefit from the increasing
  demand for existing and future value-added
  multimedia products.

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CLIENT ACQUISITION STRATEGY

• Confirm its effort to find new clients through
  its major advertising campaigns (39th-biggest
  advertiser in France in 2004, source SECODIP)
  in the press, on television and on the radio
• Accentuate the cross-marketing of its products
  and services
• Increase its product advertising over the
  Internet
• On its own sites
• By developing its affiliation network
• By increasing its buying of advertisements on the
  Internet
• Develop its Mobile Internet marketing
• Collaboration with the mobile telecom operators
  for site referencing and co-marketing
• Buy sponsored links on telecom operators mobile
  internet protals
• Optimise its Mobile Internet sites, in particular
  thanks to Indexs experience in Japan
• Increase its client base and advertising volume
  by finding new B2B partners allowing for the
  indirect acquisition of end customers and use of
  available advertising space
• In France
• Outside France, particularly by finding pan
  European or international partners synergetic
  with the Index group companies

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GEOGRAPHIC STRATEGY

• Develop its position on the existing markets
• Germany
• Belgium
• Spain
• Ireland
• Netherlands
• Portugal
• Switzerland
• Thailand
• Boost its efforts in certain European countries
• UK
• Italy
• Austria
• Initiate efforts on new promising markets
• Russia
• Eastern Europe
• USA

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The US Mobile Entertainment Market

• Over 175MM mobile subscribers
• 2.1 Billion in mobile data services in 2004
• 400MM total ringtone/ringback sales
• A 100 increase from 2003
• Expected to increase to 700MM in 2005
• 300MM total in Mobile Games
• 150MM total Mobile Images
• Other emerging services include video, video
  ringtones, branded entertainment, fan clubs and
  advertising tie-ins

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The US Mobile Entertainment Market
In Billion USD
Source Nielsen Entertainment market survey
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Current Competitors

• Competition
• The opportunity to exploit the US mobile market
  begins now

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Strategy To Win in the US Market

• Promotion and sales via Carrier Deck and Direct
  Response
• Content Development and promotion strategy
• Aggressive targeting by demography and lifestyle
• Urban, regional, Christian, male, gay, ethnic,
  etc.
• Content acquisition and content ownership
• In every vertical, we will endeavor to own
  content to increase margin creatively
• Partnership with major brands, content owners,
  talent managers
• Total integration with content owner and brand
  product initiatives
• Co-marketing, promotional and developmental
  efforts
• Sales, Marketing and Advertising
• Direct Response, co-branding, carrier deck, media
  outlets

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Current Initiatives

• Major Branded launches Q2
• Launch of first services in April 2005
• Massive distribution and marketing
• Content Acquisition and distribution

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Future prospects and strategy

• 2005 trends
• 20 to 30 growth in revenues
• Margins maintained

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STOCK MARKET INFORMATION
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Stock market information

• Capitalisation 267 million as at 25 March 2004
• Distribution of capital
• Contact Jeremy Prince jeremy.prince_at_123m
  ultimedia.com - 05 61 43 50 50

G5 (wholly owned by Patrick and Brigitte
Abadie) 20
Others 1.6
Free Float 21.1
Sedaine Benelux 7.2
Index 50.1
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APPENDICES
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Appendices

• Key information on Index
• Detailed accounts

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Index le leader japonais des fournisseurs de
contenus multimedia
Fuji Television Network
Fuji network stations deliver highest quality
digital broadcasts to audiences around Japan
Has been developing cutting- edge technologies,
including the world's first 3G video handset for
the Japanese market in 2001
Leading conglomerate active in Metal, Food,
Chemicals, Financial Services and Electronics.
Active in the mobile telecommunication sector via
MS Communications
Largest advertising conglomerate firm in Japan
and one of the largest in the world
World's leading supplier of computer,
semiconductor and networking equipment.
Responsible for developing the first 3G handsets
A major broadcaster extending coverage across the
entire Japanese Archipelago
Subsidiary /Affiliates / Portfolio companies
Animation planning
Mobile content provider
Mobile content provider
Website operator
Sports related information provider
Mobile contents provider
Broadband system developer
Support communication and broadband network
Magazine publisher
E-commerce operator
Mobile contents provider
Comm. device manufacturer and system developer
Mobile contents provider
Mobile contents provider
Mobile media and infrastructure provider
JAVA software developer
Fashion related website operator
Catering service organizer
E-commerce and content service
DAIICHIKOSHO CO. LTD
GEO
TOEI
39
Consolidated balance sheet
40
Consolidated profit and loss acount
41
Cash flow statement