The X Factor

Andrea Zappia CEO – Sky Italia

2

This document contains certain forward looking statements with respect to the Group’s financial condition, results of operations and business, and our strategy,

plans and objectives for the Group. These statements include, without limitation, those that express forecasts, expectations and projections, such as forecasts,

expectations and projections in relation to new products and services, the potential for growth of free-to-air and pay television, fixed line telephony, broadband and

bandwidth requirements, advertising growth, DTH and OTT customer growth, On Demand, NOW TV, Sky Go, Sky Go Extra, Sky+ HD, Sky Q, Sky Store, Sky Online, mobile,

Multiscreen and other services penetration, revenue, administration costs and other costs, advertising growth, churn, profit, cash flow, products and our broadband

network footprint, content, wholesale, marketing, synergies and integration, and capital expenditure.

These statements (and all other forward-looking statements contained in this document) are not guarantees of future performance and are subject to risks,

uncertainties and other factors, some of which are beyond the Group's control, are difficult to predict and could cause actual results to differ materially from those

expressed or implied or forecast in the forward-looking statements. These factors include, but are not limited to, the fact that the Group operates in a highly

competitive environment and faces competition from a broad range of organisations, the effects of laws and government regulation upon the Group's activities, the

fact that the Group’s business is based on a subscription model and its future success relies on building long-term relationships with its customers, its reliance on a

complex technical infrastructure which is subject to risk of failure, change and development, failure of key suppliers, the Group’s exposure to financial market risks, the

fact that the Group must protect its customer and corporate data and prevent breaches of security, risks inherent in the implementation of large-scale capital

expenditure projects, the fact that the Group relies on intellectual property and proprietary rights which may not be adequately protected under current laws or

which may be subject to unauthorised use and the fact that people at Sky are critical to the Group’s ability to meet the needs of its customers and achieve its goals

as a business.

Information on the significant risks and uncertainties is provided in the “Principal risks and uncertainties” section of Sky’s Annual Report for the full year ended 30

June 2016. Copies of the Annual Report are available from the Sky plc web page at www.sky.com/corporate and in hard copy from the Company Secretary, Sky plc,

Grant Way, Isleworth, Middlesex TW7 5QD. All forward looking statements in this document are based on information known to the Group on the date hereof. The

Group undertakes no obligation publicly to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

3 Source: Agcom, Bloomberg

1990 2003 2006 2011 2013

Pay TV enters

Italy with

Tele+

A 2nd player,

Stream, enters

Pay TV

NewsCorp

joins Stream in

a 50% JV

Stream acquires 100% of Tele+

Sky Italia starts

operations with 1.8m subscribers

1993 2000

Sky Italia reaches

EBIT break-even with

3.8m subscribers

Sky Italia becomes

the No 1 player in

terms of turnover

Sky Italia

launched 1st

triple play offer

in bundle with

Fastweb

2016

NowTV launch

2015

Sky Italia acquired

TV8 FTA channel

Tele+ Sky Italia EBIT

break-even Stream Newscorp Triple play Sky #1 OTT FTA Sky Go &

On Demand

2012

Sky Italia launch

Sky Go and On

Demand

4 Source: Ampere Analysis

€19.6bn

Ad revenue 1.5

2.0

Subscription

revenue

Public TV

license fee

TV households 42m 28m 25m 18m

TV market in top European countries (CY 2015)

27m

5.2

8.4

6.0

4.6

5.2

4.5

2.5

5.3

3.2

1.8

3.0

3.2

1.7 1.4 2.0

€14.3bn

€11.0bn

€8.0bn

€5.1bn

5

2.7 2.8 2.7

2.5 2.4 2.4

2.8 2.2 2.2

Sky Italia RAI Mediaset Group Other

4,742 4,725 4,742

Source: Ampere Analysis Source: Company data

Sky Italia Customer base (‘000) TV revenue by player

€8.9bn

€7.9bn €8.0bn

2010 2014 2016 2010 2014 2015

6

• 154 pay channels, 65 HD, 22 PPV

• 80% of customers have a Sky+ HD box

• More than 50% of customers use Sky Go

• c. 52% of boxes connected and 5m downloads per week

• #3 advertising sales player

Revenues Operating profit Subscribers Monthly ARPU Employees

Company data 2016 – exchange rate £/€ at 1.34

7

c.a. 6,5m 1.0m 18.6m

DTH pay

DTT pay

OTT FTA

only

Platforms

Pay - 7.5m

(Penetration - 27%)

Main Player /

Propositions

25 million homes

c.a. 6.5m

8

Leader in core PAY TV Fastest growing

Free-to-Air player

First to launch IPTV and with

distribution deals with all telcos

Highest quality offer in

nascent OTT arena

1. 2. 3. 4.

9 Source: Company data

*including Sky On Demand + Sky Go + NOW TV (exc. Overlaps)

4,688

4,764

1.7m

3.2m*

13.9%

11.1%

Residential churn

Growing in the last 12 months (‘000) Lower churn

Biggest connected base in the country Growing ARPU

€42.5

€42.9

Residential ARPU

Closing base Q1 2016 Closing base Q1 2017

2013 2016 2013 2016

2013 2016

On Demand connected box

10

22

13

9

-1 -4 -5

-8

-17

Source: internal research

NPS Benchmarking

11

• Grow revenues at the expenses of our competitors

becoming a key player in the FTA advertising base

segment

• Cross promote Sky pay TV offer

• Optimize monetization of sport rights with

mandatory FTA exposure (MotoGP/Europa League)

and of original productions

12 Source: Auditel

0.1

-0.2

-0.5

Sky FTA Discovery Rai (state-

owned public

broadcaster)

Mediaset

Sky FTA share growth Yoy growth in share of viewing

Q1FY17 vs Q1FY16

1.91

3.08 1.2

Q1 2016 Q1 2017

13

7% 12%

25% 21%

65% 56%

3% 4% 6%

Discovery

Cairo

Mediaset

Rai

Sky Media

Source: Nielsen

2010 2016

5

-4

-9

1

5

Sky Media Rai Mediaset Cairo Discovery

Market share by player Variance FY10-FY16 (pp)

14

TV series and Movies on pay window

As many new series as Netflix

Strong Kids offer

Streaming to TV with NOW TV box

Football and Sport Monthly passes

15

Leading content creator and

unrivalled breadth of content

choice

Best customers platforms Disciplined cost management Most loved media brand and

passion for customers

1. 2. 3. 4.

16

A strong portfolio of basic channels Best offer of exclusive third party

channels, only available on Sky

Italian TV company with some of

the most popular shows

17

Video

SkyUno

A unique approach

(3 mins)

18

• More than 70% of our customers takes Sky Cinema

• Superior movie offer with 2,000 titles/year and 3x

more movie premieres than competition

• Exclusive deals with 5 Hollywood studios

• 12 HD channels and successful use of pop-up/event

channels (i.e. Rocky channel in Nov.)

• All movies in HD, On Demand and available

on Sky Go

• Key partnerships with Italian movie distributors

• Strongest Italian movies offering

International

Studios

Italian

Distributors

Strongest movies offer

19

Video

Cinema

Italy’s leading Movies service

(2:06 mins)

20

Football MotoSports Basketball Golf Other sports

Sport – season 2016/2017

21 Source: Serie A public records

2010-2012 Total average cost p.a. index at 100

Series A rights overview and costs

2010-12 2012-15 2015-18

• Matches: 380/380

• Exclusive matches : 56 /380

• Avg. cost p.a. index: 70

• Matches: 380/380

• Exclusive matches : 132 /380

• Avg. cost p.a: 71

• Matches: 380/380

• Exclusive matches : 56/380

• Avg. Cost p.a. index: 72

Total (avg cost pa)

100 104 118

22

• Nearly one in two of all Italians watching at the time watched

2015 MotoGP season finale on Sky channels

• This year MotoGP at +19% vs PY, and F1 viewing is +9% vs PY

33 weekends of great Sport between Spring and Autumn

23

Video

Sport

(1:44)

24

74

86 91 90 89 86

Avg cust sat Football Moto GP F1 Tennis Basketball

Satisfaction with Sports on Sky (%)

25

26 Source: Company data.

On Demand

Sky Go

HD

Multivision

MySky

Products & Services

12m 11m

10m

9m

7m

5m

2011 2012 2013 2014 2015 2016

27

2011/2012 2013/2014 2012/2013 2015/2016 2014/2015

Connected Multivision

New EPG

restart

On Demand HD

28

54

36 36

29

33 33

29

25

71 70

72

73

74

Source: Internal research – August 2016

Brand perception (%) Customer satisfaction with Sky (%)

2012 2013 2014 2015 2016

29

”I love the new eXtra program, in

particular the fact I can watch movies

and TV series in advance”

(5-year tenure sub)

”eXtra program allows the old tenure

client to always have more. Great”

(10-year tenure sub)

• Customers receive exclusive Sky benefits

including

– discounts to Sky products and to partners

– unique service and caring

– attendance to Sport events and Sky programs

• More than 1.6m enrolled customers (1m

redemptions)

• 34% benefit in churn

Source: Company data

30

Video

eXtra

Sky loyalty Angels

(1:00 min)

31

32% 39%

49% 51% 52%

3.8 3.9 3.1

2.7 2.6

Q1 FY17

at 2.5

Diversion rate

Call rate

Source: Company data

2012 2013 2014 2015 2016

32

€33m

€68m

€98m

€126m

Source: Company data

Achieved

Ongoing

€28m

€98m

Net EBIT impact of Efficiency program

2014 2015 2016 2017

33

Strengthening

our TV

experience

1. Leveraging our

multiplatform

strategy

2. 3. Broadening our

revenue growth

34

Strengthening

our TV

experience

1.

35

1.1 Sky families have

at least one kid

2.2m

Sky Go users

2..2m

On Demand customers

2.2m On Demand

customers

Sky Go Plus Sky Go Plus HD On Demand Sky IP only Sky Q product

line & evolution

MySky content

discovery

New group

platform

Cinema relaunch

Next 18 months will deliver more innovation than ever building further gap vs competition

36

Smartphones Roku 4 TV box HD Chromecast

NOW TV will introduce some step changes to become more attractive than ever

37

Highest ratings ever for a scripted show on Sky

Season 2 averaged c.2.3m viewers (more than

2x Games of Thrones)

Sold in more than 130 countries all over the world

“Italy’s answer to the Wire” (Variety)

“Gomorra: the most important TV series

on mafia with the Sopranos’’ (Le Monde)

In co-production with HBO/Canal Plus

Director “Academy Award-winner” Paolo Sorrentino.

Starring Jude Law, Diane Keaton

A great success at the Venice Film Festival

Second best ratings for a TV Series on Sky behind

Gomorrah

Sold in 80 countries

‘’The Young Pope feels unique. It’s arthouse

TV’’ (Esquire)

‘’It could well be Sorrentino’s masterpiece’’

(The Economist)

“1992 is an exciting piece of work’’

(Hollywood Reporter)

‘’It seems like House of Cards but it’s Clean

Hands Italy ’’ (Corriere della Sera)

38

Video

Original Productions

Internationally acclaimed TV series

(2:22 mins)

39

Gomorra 3 1993 1994 The Young Pope 2

40

Leveraging our

multiplatform

strategy

2.

41

Local Marketing Cities

Local Marketing

37 Cities 75% of

Sky Target

Multiplatform

Experience

Digital First &

Now Retail

Sky Core Target

Lower income areas

Retail Right sizing

• Only kept retail stores

where needed

Tiering offer for the

South (Sky Start)

South – Italy Areas

From national to local, unique capability to address healthy growth opportunity

42

17%

19%

27%

21%

16% Other Clusters

Heavy linears

Sport lovers

Independent

Ladies

Media Pioneers

c.5m

Headroom target

% on Sky base

31%

17%

24%

10%

18%

How we target them

Media

Pioneers

Independent

Ladies

Sport

Lovers

Heavy

Linears

Sky Sky Start Telcos Bundles NOW TV

This strategy allows us to target different groups with different propositions

Source: Internal research data

43

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Monthly Calcio & Sport packs at €19.99 and €29.99

€19.90 €21.90

€30.90

TV

Se

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€44.90

€9.99 €9.99 €9.99

€14.99

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€58.90

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€73.90

3 p

ac

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€22.98

Sky Box Sets included

Bu

nd

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3 p

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€19.99

We offer a clear and comprehensive pricing for all the target

44 Source: E&Y 2016 data

Value-for-money offer

through bundle Sky pay TV,

Fastweb Broadband & Calls

5-year non-exclusive

SKY over IPTV agreement

effective since spring 2015

NOW TV bundle with mobile

and fixed Broad Band

NOW TV bundle with Mobile

5.5m broadband customers 1.8 broadband customers

1.7m broadband customers

2.0m broadband customers

(inc. H3G ITA)

We offer choice of platforms through relationship with all leading telcos

45

3. Broadening our

revenue growth

46

0

0.5

1

1.5

2

2.5

3

3.5

4

Sep

FY15

Dec

FY15

Mar

FY15

Jun

FY15

Sep

FY16

Dec

FY16

Mar

FY16

Jun

FY16

Sep

FY17

Source: Nielsen 2016 data

TV8 launch

3.1 3.3

PAY

FTA

€3.6bn €3.8bn

Source: Auditel

We have ambitious and achievable targets to grow and monetize our presence in FTA

We target a 4% National Share The big Ad Revenue opportunity is in FTA

2015 2016

Target 4%

47

Nov ‘16 Dec ‘16 Jan ‘17 Feb ‘17 Mar ‘17 Apr ‘17 May ‘17 Jun ‘17

Kids Got

talent

FTA Content roadmap

We have a clear content roadmap building on dedicated programs and synergies with pay TV

48

Growing on advertising revenues further thanks to new Sky Adsmart technology

•

•

•

•

49

Newco partners account for c.40%

of Box office Italian movies

In FY16, 28% of total Box Office

revenues were from Italian titles…

16.8%

10.1%

9.2%

6.6%

0.3%

Other

FY15 FY16

Italian titles

Non-Italian

titles

€605m €681m

Overall 9 of top 10 most viewed

titles on Sky channels were Italian

25% 28%

Project objectives

• Expand our incremental

revenues growth

• Guarantee access to top

Italian movies

• Introduce a new model in

the market

• Tie up relationship with

partners and talents

Source: Cinetel

Source: Cinetel

Launching a new movie distribution with five major Italian independent producers

2015 2016

50

Leadership in online

Sports and News

Portfolio of digital assets

worth of Sky brand

Digital leadership Pillar

Monetizing traffic on

web and new apps

Deploying new

monetization models

Revenues generation

Use Digital to enrich

Customer data & insights

Simplify & improve

customer and prospect

digital interactions

Customer centricity

Objectives • Ranking Top 1 in Sport Digital Audience and Top 3 in News

• Ranking Top 1 in Sport and News Apps

Key

actions

We are at the beginning of our digital monetization journey

51

Gomorra 2

• Italy is one of the biggest European markets in the media sector

• Our diversified strategy is in place and is working

• Best in content and able to manage with discipline sports

rights choices

• State of the art platforms

• Leading brand

• Driving low single digit revenue growth and an accelerating

profit profile