The TOM Group

Y2002 Third Quarterly Results Review

6th November 2002

2

Review of the Quarter

Close to tripling of EBITDA q-o-q

9% q-o-q growth in total revenue in line with market expectation

13% offline revenue growth, 8% narrowband revenue growth

24% growth in gross profit, with gross margin increasing from 39% to 44%

Achieved free cash flow after interest and taxes

Secured positive cash flow for the full year

Strengthened senior and divisional management teams

3

Part I

Financial Analysis

4

Q-o-Q Review:9% Revenue Growth with Significant Margin Increases

HK$'million Q2 2002 Q3 2002 % Change

Revenue 414.7 451.6 9%

Gross Profit 161.0 200.2 24%

Gross margin 39% 44%

EBITDA 12.5 33.3 1.7x

EBITDA margin 3% 7%

Depreciation & Amortisation (38.3) (45.4) 19%

Loss attributable to shareholders (49.6) (44.1) 11%

5

Y-o-Y Review:2x Revenue Growth, HK$68M EBITDA Improvement

HK$68M improveme

nt

Group Revenue Group EBITDA

HK$’million

Online36%

increase

Offline2.4x

revenue increase

159

452

HK$’million

# Q3 2001 EBITDA loss before restructuring costs

6

Q3 2002 Revenue In Line With Market Estimates

452

HK$’million

415

HK$'M Salomon BNP Cazenove TOMRevenue 441 448 450 452

Offline13%

revenue growth

OnlineEmphasis on gross profit

growth

7

8% Increase in Online Gross Profit with 8% Point Gross Margin Improvement

Online Revenue Online Gross Profit & Margin

HK$’million

Narrowband

Steady growth of

high margin businesses

BroadbandRe-organised to focus on high margin businesses

HK$’million

2527

34%42%

8

Q3 2002 EBITDA Almost Tripled

Positive EBITDA for first 9 months of 2002: HK$11M

HK$’million

HK$'M Salomon BNP Cazenove TOMEBITDA 20 28 30 33

9

Segmental Review

Q3 2002 Revenue by Type

Q3 2002 Revenue by Sector

Advertising49%

Online 14%

Publishing43%

Outdoor17%

Sports & Entertainment

26%

Q3 2002 Revenue by Region

Mainland China

47%

HK13%

Taiwan40% Non-

Advertising51%

10

Analysis of Net Loss

HK$'M Q2 2002 Q3 2002

EBITDA 12 33

Depreciation & Amortisation (38) (45)

Interest, Tax, MI (24) (32)

Loss attributable to S/H (50) (44)

Profit (Loss) if less D&A (11) 1+

Q-o-Q:

Q3 net loss entirely generated by D&A – Net profitability if D&A were

stripped out

HK$'M Q1-3 2001 Q1-3 2002 Variance

EBITDA (147) 11

Depreciation & Amortisation (80) (116) 36

Interest, Tax, MI 2 (63)

Loss attributable to S/H (225) (169) 56

Profit (Loss) if less D&A (145) (53) 92

Y-o-Y:

D&A increased by HK$36M –

Net loss would be dramatically reduced

without D&A

11

Part II

Operations Review

12

PUBLISHING: Continued Expansion into Mainland ChinaCross-fertilisation of Content among Group Publications

Business Weekly provides content to Sanlian’s flagship business monthly Advantage《競爭力》

Content Licensing to Mainland Publishers

《向左走向右走》by Grimm’s best-selling author (幾米) recorded sales of 140,000 within 6 months

A series by Red Ink’s best-selling author (痞子蔡) sold over 680,000 copies

Licensed Red Ink’s The First Intimate Contact《第一次親密接觸》 publishing and film rights

Licensed PC Home and Mom Baby simplified Chinese publishing rights – expected circulation of 150,000+ per issue

Import

Business Weekly cultivated 1,000 Mainland-based subscribers since Q2 2002

Total Content Licensing Arrangements:

135 book titles

7 magazine titles

13

OUTDOOR: Adding Value Through Integration

Integration of sales operations to drive revenue synergies

• TOM Outdoor Media Group secured HK$11.5M new sales, HK$26.5M year-to-date

• Conducted a quarterly TOM outdoor sales conference

• Aligned sales targets, strategies and service standards

• Centralised some inventory with the Group’s sales team to maximise productivity

Differentiation through value-added services

Case Study: Fench Media

Client: Hong Ta Group

Campaign: New product launch

Value-Added Services:

Market, consumer, product & competitive analysis

Comprehensive promotional strategy

Won a RMB10M nationwid

e contract

VAS Teams under Hold Co

Outdoor Media Creative Team

R&D Team (to innovate new outdoor assets & technology)

Market Intelligence Team

14

SPORTS & ENTERTAINMENT: High Margins Achieved

60+ sponsors

80+ hospitality box members

Syndicated to CCTV, Eurosport, TVB, etc.

Contribution from Salem Open & Serena Williams Live

New TV Programme: Omega Golf Magazine

Major sponsors: Omega, Farmer’s Spring Water & Vinda

Syndicated weekly to 15 TV Channels in China

New Sporting Right:

Marketing agent for Chinese Football Association (CFA) women’s soccer team

Preparing for women’s World Cup next year

15

ONLINE: Focus on Growing High Margin Businesses

SMS User & Volume Growth

Mobile / Pay E-Mail Subscriber Growth

170K

6K

68K

400K

350K

1.2M

2.1M

GP Margin:85%+

No. of SMS Users

50K

200K

1.2M

Daily No. of SMS Messages

GP Margin:85%+

MMS (Multimedia Messaging Service)

First portal to be China Mobile’s MMS content provider

http://mms.tom.com

4.7M

600K

280K

16

Building A Strong Management Team: Publishing

CEOJan Hung Tze

CEOJan Hung Tze

Senior AdvisorJames Yang

Senior AdvisorJames Yang

Finance DirectorQuincy Tang

Finance DirectorQuincy Tang

GM – Corp DevAnthony Tse

GM – Corp DevAnthony Tse

DGM – BDJason WongDGM – BD

Jason Wong

Business WeeklyJames Jin

Business WeeklyJames Jin

CiteHo Fei Peng

CiteHo Fei Peng

PC HomeLeon TungPC HomeLeon Tung

Sharp PointMichael HuangSharp Point

Michael HuangYazhou Zhoukan

Francis TiongYazhou Zhoukan

Francis Tiong

Publishing Division Management Team

Corporate – Publishing Team

SDX Joint PublishingWang Jixian

SDX Joint PublishingWang Jixian

Consulting Chief Editor (HK)

Lau Sai Leung

Consulting Chief Editor (HK)

Lau Sai Leung

Popular Computer GroupChen Zong-zhou

Popular Computer GroupChen Zong-zhou

CNPIEC JVWen Xiao-fanCNPIEC JV

Wen Xiao-fan

26 years of ad sales, circulation, editorial, BD, strategic planning & management experience with Taiwan’s United Daily News Group

Former CEO & Publisher of CUP Magazine & Managing Editor of Next Magazine

Senior management positions at HK-listed Leefung-Asco Printers Holdings for 10 years

Former President & Chief Editor of China Map Publication House

“China’s Top 100 Publisher” award*

Published over 10 books & 100 papers

* Awarded by the CPC Ministry of Propaganda, General Administration of Press & Publications, & Chinese Publishing Association

17

Building A Strong Management Team: Outdoor

PresidentRobert XiePresidentRobert Xie

Senior AdvisorXu Zhiming

Senior AdvisorXu Zhiming

VP – FinanceAlex Chu

VP – FinanceAlex Chu

VP – Media ServicesSam Lam

VP – Media ServicesSam Lam

VP – BDChristopher Tan

VP – BDChristopher Tan

Senior AdvisorTan Zhi

Senior AdvisorTan Zhi

GM – Corp DevSteven Wu

GM – Corp DevSteven Wu

GM – FinanceTerence HonGM – FinanceTerence Hon

Each of the 12 subsidiaries• General Manager

• TOM appointed Financial Controller

Each of the 12 subsidiaries• General Manager

• TOM appointed Financial Controller

Outdoor Division Management Team

China Operation Center

Corporate – Outdoor Team

10+ years with media agencies, including Zenith Media & Leo Burnett

Headed key outdoor media BD projects in Asia

Held senior positions at China Resources Group

Experienced in management & operational restructuring, turnaround management, BD & strategic planning

Held senior finance positions with Coca-Cola (China); a HK-based group with Mainland operations; & a listed Australian company

18

Business Outlook: High Organic Growth on a Controlled Operating Infrastructure & Steady Cost Base

                      

HK$’million

Critical mass achieved