Tiscali S.p.A. : 10/05/2012 Tiscali’s Board of Directors approves the results for the first quarter of 2012

Cagliari, 10 May 2012
Tiscali S.p.A.'s Board of Directors has approved the results as at 31 March 2012

ƒ Consolidated revenues totalling EUR 59.7 million;

ƒ Gross operating result at EUR 17.4 million (-5.6% YoY);

ƒ Net EBITDA after provisions of EUR 14. million (+ 25.5% YoY);

ƒ Positive Group EBIT of EUR 4.1 million, compared with a negative balance of EUR

ƒ Group net profit of EUR 0.3 million, compared with a loss of EUR 6.4 million in

ƒ Gross Margin percentage up sharply at 52,4% (46,3% in 1Q2011);

ƒ Media Revenues up by 11.6% YoY to EUR 5.2 million (1Q of 2011 EUR 4.6 million);

ƒ Positive free cash flow for EUR 7.6 million;

ƒ Total Broadband customers equating to 479 thousand; mobile customers up 53,8%;

ƒ Negative net financial position of EUR 195.8 million, an improvement compared

Tiscali's Board of Directors has approved the quarterly report as at 31 March 2012. The results once again reflect the efforts made by the company in a particularly complex market context, where considerable rationalisation of its operating structure responds to the pressure on margins of the telecommunications business. Tiscali continued with the consolidation of its position with regard to web services, also focusing specifically on innovative communications services.

Tiscali Group revenues during the first quarter of 2011 came to EUR 59.7 million, down with respect to the balance of EUR 69 million recorded in the same quarter of 2011.
During the first quarter of 2012, internet access and voice services - the Group's core business - represented around 83% of total turnover. The Gross Operating Result before provisions came to EUR 17.4 million, compared with a figure of EUR 18.5 million in 1Q2011 (-5.6% YoY).
As at 31 March 2012, the number of ADSL customers came to around 479 thousand, compared with an activated client figure as at 31 March 2011, of around 541 thousand. The number of clients already activated and linked via the Tiscali network infrastructure (unbundling) came to around 337 thousand (370 thousand in the 1st Q of 2011). The decrease with respect to the corresponding figure for 2011 mainly reflects the impact of the cancellation during 2011 of lines relating to defaulting or silent customers, a process started in the second half of 2010 and completed in 2011. This process, as already indicated in the past, has made it possible to make important savings in operating costs. During the 1Q2012, 3000 defaulting customers have been cancelled.

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

During the first quarter of 2012, total mobile customers amounted to more than 153 thousand, up
53,8% when compared with the 1st Q of 2011.

Access: equating to 77,2% of total revenues

The segment in question, which includes revenues from broadband (ADSL) and narrowband (dial- up) internet access services, the flat component of the bundled offers and VoIP, generated revenues during the quarter of EUR 46.1 million, representing around 77,2% of the Group's total revenues, down slightly compared to the figure for the same period in 2011 (EUR 50 million). The decrease is attributable to a decrease in customer base and to the natural contraction of the narrowband segment.

Voice: 5.7% of total revenues

The Voice segment includes traditional and wholesale telephone services. During the first quarter of
2012, voice service revenues came to EUR 3.4 million, down with respect to the corresponding figures in the 1st Q of 2011 (EUR 8.1 million). The decrease is due, besides the natural decline of analogue voice, to the sharp decline in wholesale services operated as a result of the low margin of the same.

Business Services: 6% of revenues

Revenues from business services (VPN, housing, hosting services, domains and leased lines), excluding those from access and/or voice products for the same customer base already included in their respective business segments, amounted in the first quarter of 2012 to EUR 3.6 million, down with respect to the EUR 4 million in the 1st Q of 2011. This is mainly due to the negative effect on revenues arising from the termination of services delivered to the former subsidiary Tiscali UK.

Media and value added services: +11.6% YoY

In the first quarter of 2011, the revenues in the media and added value segment (linked to direct and indirect advertising through commercial contracts with search engines) amounted to EUR 5.2 million, an increase of 11.6% compared to the figure for the 1st Q of 2011 (EUR 4.6 million). The increase continues to be higher than the trend for the entire market (which showed a grow of 8,5%) and is attributable to the rise in traffic on the properties managed by the concessionary agent TISCALI:ADV and the increase of its customer base, achieved thanks to the focusing of the editorial product on the information segment, the strong coverage of direct customers and the verticalisation of the targets, which lead to an improved profit of the traffic. As a point of fact, all the network sites in 1Q2012 developed more than 3.4 billion pages visited, registering growth of 19.3% with respect to the same figure in the 1st Q of 2011 (more than 2.9 billion pages visited).

The Gross Operating Result for the quarter, before provisions for risks, write-downs, depreciation and amortisation, came to EUR 17.4 million, down with respect to the corresponding balance of EUR
18.5 million in the first quarter of 2011 (which reflected the positive effect of VAT recover for more than EUR 2 million). However, the percentage figure disclosed growth of 2.4 points, as impact on sales revenues, coming to 29.2%.
EBITDA net of write-downs of receivables and other provisions was EUR 14. million in the first quarter of 2012, up 25.5% compared with the same balance for 2011 of EUR 11.1 million.

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

16.3 million, 23.6% of revenues).

The operating result (EBIT) for the first quarter of 2012, net of provisions, write-downs and restructuring costs, revealed a positive balance of around EUR 4.1 million, a clear improvement with respective to the negative balance of EUR 2.3 million in the same period last year. The sharp improvement is due to the decrease in amortisation/depreciation (also following the revision of the useful life of certain fixed tangible and intangible assets and customer activation costs) and the lower provision to the allowance for doubtful receivables.

The Group's net result was a profit of EUR 0.3 million, up with respect to the comparable figure for
2011, a loss of EUR 6.4 million.

As at 31 March 2012, the Tiscali Group held cash, cash equivalents and bank deposits totalling EUR
5.4 million, against net financial debt, at the same date, of EUR 195.8 million (EUR 200 million as at
31 December 2011).

(*) includes leasing short term debt

(**) includes leasing long term debt

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

Notes:

(1) Includes the bank payables of Tiscali Italia S.p.A. and Tiscali S.p.A. for EUR 8 million;

(2) Includes the short-term component equal to EUR 8.2 million relating to payables to Senior Lenders, which includes principal and interest portions repayable within 12 months;

(3) Includes EUR 0.4 million of short-term leasing of the subsidiary Tiscali Italia S.p.A.;

(4) The entire amount of EUR 126.3 million relates to the long-term component of the debt due to Senior Lenders; (5) Includes the "Sale and Lease Back Sa Illetta" debt for EUR 57.6 million.

In order to ensure consistency with the data provided in previous reports, the above table includes guarantee deposits under other cash equivalents and non-current financial receivables. The table below provides a reconciliation of the above financial position with the same statement prepared in accordance with Consob Communication DEM/6064293 dated 28 July 2006, so as to provide clarity.

Investment were made during the quarter for around EUR 6.4 million essentially relating to the acquisition of new customers. Furthermore, in the same period the Company generated a positive Free cash flow of EUR 7.9 million.

Tiscali S.p.A.: 2011 draft financial statements approved

On 30 March 2012, Tiscali's Board of Directors approved the 2011 draft financial statements.

In a market context which sees great pressure on margins deriving from the strong competition on TLC services, and an area of forecast growth on web and Over The Top services, the Company is concentrating its management efforts on rationalisation and turning the user base to profit, with particular attention to containing the churn and focusing on the acquisition of customers in the LLU covered areas. This action was aimed at improving the cash flow generation to service financial debt and working capital. Particular attention will be paid to the improvement of the collection cycle vis-à- vis bulk customers as well as the improvement of the ADSL customer activation procedures, with a consequent decrease in the average activation times and rise in the redemption.
The development of new converging communication and rich communication services (such as indoona and streamago) plays an important role for the purpose of more efficiently using the IT and network infrastructure and improving the user experience. In this regard we note the continued growth of indoona customers and the recent launch of the service Streamago Premium, one of the first services on the market to enable the live streaming of events with a plug & play and low-cost service for businesses, organizations and associations.
With regard to the Media segment, the objective is to consolidated the market positioning of the network and thus continue with the growth process implemented.

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

The results presented confirm the endeavour made by management with regard to the operational management so as to maintain satisfactory performances despite the difficult macro-economic context and particularly challenging competitive market situation.
The Group's senior debt includes financial and operating covenants. As at 31 March 2012, said covenants had been observed.
Note that the interim management report as at 31 March 2012 shall be made available to the general public as per the formalities and within the deadlines laid down by law.

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

I, the undersigned, Luca Scano, executive in charge of drawing up the corporate accounting documents of Tiscali SpA, declare - pursuant to Article 154.2 bis of the Italian Finance Consolidation Act - that the accounting information contained in this press release corresponds to the documentary results, books and accounting records of the parent company and to the information provided by the companies included in the consolidation area.

Luca Scano

Executive in charge of drawing up the Company's accounting documents

This press release contains certain forward-looking statements based on current expectations and projections in relation to future events. These forward-looking statements may be affected by known or unknown risks, uncertain events and the assumptions made. This press release also contains unaudited pro forma financial data. Tiscali does not undertake to publish updates or modify any forward-looking statements, either to provide new information or in response to future events or other circumstances. In light of the aforementioned risks, uncertainties and assumptions, the forward-looking statements contained in this press release may not come to fruition. Any statement relating to past performance or activities should not be considered a guarantee of future performance or of such activities continuing in the future.

Tiscali S.p.A. (Borsa Italiana. Milan: TIS) is one of the leading alternative telecommunications companies in Italy. Tiscali provides its private and business customers with a vast range of services: Internet access through dial-up and ADSL, as well as voice, VoIP, media, and added-value services and other technologically advanced products.

As at 31 March 2012 Tiscali reported around 479 thousand ADSL customers in Italy. Of these, around 339 thousand are Dual Play customers.

The Tiscali website may be accessed at www.tiscali.it.

Gianluca Nonnis

Tel. +39 070 46011 - ir@tiscali.com

Image Building

Mara Baldessari - Simona Vecchies

Tel: 02 89 01 13 00 - tlc@imagebuilding.it

Tiscali S.p.A. Sa Illetta

09122 Cagliari

Italy

www.tiscali.it

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