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FY 2023
PRELIMINARY RESULTS
FY ‘23 Preliminary Results
15 February 2024 2
Disclaimer
This presentation contains statements that constitute forward looking statements regarding the intent, belief or current expectations of future growth in the
different business lines and the global business, financial results and other aspects of the activities and situation relating to the TIM Group. Such forward looking
statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied
in the forward-looking statements as a result of various factors. Consequently, TIM makes no representation, whether expressed or implied, as to the conformity of
the actual results with those projected in the forward-looking statements. Forward looking information is based on certain key assumptions which we believe to be
reasonable as of the date hereof, but forward-looking information by its nature involves risks and uncertainties, which are outside our control, and could
significantly affect expected results.
Analysts and investors are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this presentation.
The 2023 preliminary financial results of the TIM Group were drafted in accordance with International Financial Reporting Standards issued by the International
Accounting Standards Board and endorsed by the EU (designated as “IFRS”).
The accounting policies and consolidation principles adopted in the preparation of the 2023 preliminary financial results of the TIM Group are the same as those
adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2022, to which reference can be made, except for the
amendments to the standards issued by IASB and adopted starting from 1 January, 2023.
Please note that the 2023 preliminary financial results of the TIM Group are unaudited.
Alternative Performance Measures
The TIM Group, in addition to the conventional financial performance measures established by IFRS, uses certain alternative performance measures for the
purposes of enabling a better understanding of the performance of operations and the financial position of the TIM Group. In particular, such alternative
performance measures include: EBITDA, EBIT, Organic change and impact of non-recurring items on revenue, EBITDA and EBIT; EBITDA margin and EBIT margin;
net financial debt (carrying and adjusted amount), Equity Free Cash Flow, Operating Free Cash Flow (OFCF) and Operating Free Cash Flow (net of licences).
Moreover, following the adoption of IFRS 16, the TIM Group uses the following additional alternative performance indicators: EBITDA After Lease ("EBITDA-AL"),
Adjusted Net Financial Debt After Lease and Equity Free Cash Flow After Lease.
Such alternative performance measures are unaudited.
Financial and operating results
#2
Closing remarks
#3
Operations update
#1
FY ‘23 Preliminary Results
15 February 2024 4
2 years of achievements driven by solid execution
TIM Group
DELAYERING
REFINANCING
DELIVERING
Q1 ‘22 Q2 Q3 Q4 Q1 ‘23 Q2 Q3 Q4
2022-‘24 Plan
approved
Jan-Feb. ‘24
Public
consultation
on 2023
wholesale
tariffs
2023 price-
ups campaign
kick-off
‘Italia 1 Giga’
7 lots awarded
‘5G Backhauling’
all lots awarded
MoU on single
network
OF commercial
agreement
Oi mobile
acquisition
New
management
team
2022 guidance
upgrade
Inwit stake
disposal
NSH awarded
2022- ‘24 labour
agreement
signed
€ 2bn SACE
loan cashed-in
€ 0.85bn 5y
bond placed
€ 0.40bn tap € 0.75bn 5y
bond placed
Initial NBO
on NetCo
(€ 15.8bn EV)
NetCo BO
(€18.8bn EV)
+ Signing
Sparkle NBO
€ 0.36bn EIB
financing
cashed-in
€ 0.95bn Braz.
Debenture
€ 0.75bn tap
Revised NBO
(€ 17.0bn EV)
Final NBO
(€ 17.9bn EV)
Golden Power
authorization
received
Sparkle offer
CEO mandated to
negotiate further
>€ 0.7bn NRRP
anticipation
cashed-in
DAZN
agreement
renewed
ESG - Carbon
Disclosure
Project
“A” rating
received
FY ‘23 Preliminary Results
15 February 2024 5
Delivered 2 consecutive years of guidance for the 1st time since 2010-‘11
LSD = Low-Single Digit; MSD = Mid-Single Digit; LMSD = Low-to-Mid Single Digit
(1) Group figures @ average exchange-rate 5.44 R$/€ in ‘22 and 5.40 R$/€ in ‘23 (2) Upgraded in Aug. ‘22
TIM Group
Organic YoY performance (1)
SERVICE
REVENUES
o/w Domestic
EBITDA
o/w Domestic
EBITDA AL
LSD
decrease
HSD
decrease (2)
Low teens
decrease (2)
ACHIEVED ✓
Broadly
stable
LSD
growth
Flat to LSD
growth
MSD
growth
LMSD
growth
ACHIEVED ✓
ACHIEVED ✓
ACHIEVED ✓
2022-‘23 GUIDANCE
ACHIEVED ON ALL METRICS
CAPEX
o/w Domestic
€ 4.1bn
€ 3.2bn
€ 4.0bn
ACHIEVED ✓
€ 3.1bn
2022 2023
ACHIEVED ✓
ACHIEVED ✓
ACHIEVED ✓
FY ‘23 Preliminary Results
15 February 2024 6
DOMESTIC EBITDA GROWTH
for the 3rd consecutive quarter
Clear growth trajectory of Domestic trends
(1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation
TIM Domestic
Q3 Q4
Q2
Q1 ‘23
Q3 Q4
Q2
Q1 ‘22
-5.3% -4.8%
-3.5%
-1.5% -2.4%
-0.9% -0.6%
1.2%
-18.3% -16.3% -16.2%
-4.2%
-2.8%
0.5%
3.6% 5.5%
-20.4%
-18.0% -18.0%
-5.2%
-3.5%
0.1%
3.4% 5.3%
SERVICE
REVENUES
EBITDA
EBITDA AL
DOMESTIC SERVICE REVENUES
BACK TO POSITIVE
after 22 quarters
Organic YoY performance (1)
FY ‘23 Preliminary Results
15 February 2024 7
1.7% 1.6%
FY '22 FY '23
1.1% 1.1%
FY '22 FY '23
1.4%
4.8% 4.8% 5.2%
Q1 Q2 Q3 Q4
0.3%0.0%
1.5%
2.9%
Q1 Q2 Q3 Q4
TIM Entities delivered results (1/2)
TIM Group
(1) FTTH market share TIM 25.9% vs Op.2 18.5%, Op.3 18.5%, Op.4 17.4% and Others 19.6% (Source: AGCOM, data as of Sep. ‘23)
(2) Net of SPC Cloud; +7% YoY reported
Connectivity -2%
Cloud (2) +31%
Other IT +13%
Security +11%
IoT +24%
TIM
CONSUMER
(CO+SMB)
REVENUES
-4.7%
✓IMPROVED SERVICE REVENUE TREND AND ARPU
successful repricing campaign both on fixed and mobile,
limited impact on churn
✓CONFIRMED FTTH LEADERSHIP
highest market share for the 6th consecutive quarter (1)
✓NRRP: 5G COVERAGE TARGET OVER-ACHIEVED
152 areas covered (109% of YE target achieved)
ARPU
net of activation fees
Δ YoY
ARPU
human calling, net of MTR
Δ YoY
✓SERVICE REVENUES GROWTH ABOVE MARKET
AVERAGE FOR THE 2nd CONSECUTIVE YEAR
✓CONSOLIDATED CLOUD LEADERSHIP
~€ 1bn revenues from Cloud products and services, hyper
performing DCs, >2k certifications
✓>40K DEALS CLOSED IN 2023
12-month value of contracts signed +33% YoY
✓STRONG PIPELINE
up to ~€ 1.5bn from ongoing negotiations
-5.6%
-4.9%
-3.4% -3.2%
Q1 Q2 Q3 Q4
∆YoY
SERVICES
-4.2%
CHURN
monthly average
CHURN
monthly average
CONSUMER FIXED CONSUMER MOBILE
REVENUES
+4.6%
SERVICES
+5.1%
∆YoY
TIM
ENTERPRISE
FY ‘23, organic YoY performance, TIM Consumer and TIM Enterprise revenues and service revenues consistent with July 2022 disclosure
CHANGE IN REVENUE MIX
FY ‘23 Preliminary Results
15 February 2024 8
TIM Entities delivered results (2/2)
TIM Group
(1) FTTH market share TIM 25.9% (Source: AGCOM, data as of Sep. ‘23)
REVENUES
+10.7%
✓ STRONG OPERATIONAL PERFORMANCE
✓ 2023 GUIDANCE OVER-DELIVERED
SERVICES
+10.8%
EBITDA (1)
+14.7%
CAPEX
18.9%
on revenues
EBITDA AL
– CAPEX (1)
+62.1%
HSD = High Single Digit; LDD = Low Double Digit; DD = Double Digit
(1) Net non-recurring items (2) EBITDA AL net non-recurring items - CAPEX (3) Overall FTTH coverage, including NRRP and “Eurosud”
✓
✓
✓
✓
✓
REVENUES
EBITDA (1)
CAPEX
EBITDA AL-CAPEX (1)
SHAREHOLDERS REMUNERATION
HSD growth
LDD growth
<20% on revenues
DD growth
>2.9bn R$
REVENUES
+3.7%
SERVICES
-0.2%
FTTH COVERAGE
(technical units, million) (3)
7.8 9.2
32%
38%
FY '22 FY '23
FTTX COVERAGE
>95% of active lines
~63% >100Mbps
✓ FTTH ROLL-OUT ON TRACK
fiber migration and technology upgrade ongoing
✓ DELIVERED ON NRRP ROLL-OUT MILESTONES
MOBILE
TIM
BRASIL
NETCO
FY ‘23, organic YoY performance, NetCo revenues and service revenues consistent with July 2022 disclosure
MARKET SHARE
77% on TIM network
Italia 1 Giga
~76% of YE target achieved
~255k HHs connected
5G Backhauling
~106% of YE target achieved
~3.6k sites connected
~1.2k sites passed
Delay mainly due to lack of
specialized workforce in Sardinia,
no risk of penalties
Further acceleration
of execution expected ACCESSES
15.5m, >70% FTTx
HIGHEST EVER
OPERATING FCF (2)
4.2bn R$
17.5%
of net revenues
EBITDA
MARGIN (1)
48.7%
61.2m lines
ARPU
+13.1% YoY
MSR
+11.2% YoY
FY ‘23 Preliminary Results
15 February 2024 9
Transformation plan execution on track, ~€ 0.8bn additional savings achieved in ‘23
TIM Domestic
(1) Cumulated savings vs. inertial plan (2) On 2021 restated cost baseline (€ 4.8bn)
TARGET SAVINGS (€bn) (1)
o/w OPEX savings (2)
o/w cash cost / CAPEX extra-savings
2022 2023 2024
0.3
0.3
-
1.1
0.7
0.4
1.5
1.0
0.5
~€ 0.8bn additional savings in 2023
106% of incremental FY target achieved
Real Estate &
Energy
▪ Optimized management of 200k sqm
premises by leveraging home working &
Friday closure by contractual agreement
IT
▪ Licensing cost optimized through contracts revision (>90
contracts terminated or renegotiated YTD)
▪ IT spending governance strengthened through the set-up of a
dedicated committee, ITC spend optimization and systematic
review of >120 business plans
Customer
care
▪ Customer Care spend reduced 6% YoY thanks to lower human
volumes (-18% YoY), increased productivity, make vs buy mix
review, near-shoring and digital features upgrade
Highlights 2023 key contributors
Labour
▪ Hourly reduction, >70% of HCs involved,
achieving >4k FTEs reduction
▪ Voluntary exits, ~0.6k HCs (~115% of FY
target)
▪ Early retirements, >2.5k HCs (~109% of
FY target)
▪ Skill Remix, ~0.5k HCs recruited (~113%
of FY target)
Decommissioning
▪ Energy savings from 3G switch-off and
dismantling of obsolete network
elements (e.g. exchanges equipment)
▪ Public Payphones, ~14k dismantled
HR &
Corporate
▪ Insourcing, completed 2nd wave and involved during the year
~1.1k employees across >100 different roles
▪ Travel expenses contained at same level of ‘22 despite COVID
restriction (~27% below the 2023 initial budget)
▪ SMS fraudulent traffic prevention through new detection tools,
SMS cap and reduction of off-net grey routes (-31pp YoY)
Financial and operating results
#2
Closing remarks
#3
Operations update
#1
FY ‘23 Preliminary Results
15 February 2024 11
Key financials
(1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation area. Group figures @ average exchange-rate 5.40 R$/€
Organic data (1), IFRS 16 and After Lease (AL), €m and YoY trend
TIM Group
FY ‘23 vs. Q3 ‘23
Q4 ‘23
vs. FY ‘22
REVENUES
o/w Domestic
SERVICE
REVENUES
o/w Domestic
EBITDA
o/w Domestic
EBITDA AL
FY GROUP REVENUES BACK TO GROWTH
improvement on Domestic, continued growth in
Brazil
16,296
14,953
6,383
5,304
10,721
4,242
11,922
+3.1%
+2.3%
+5.7%
+6.1%
-0.7%
+1.7%
+0.6%
-1.8pp ↓
+1.4pp ↑
+0.3pp ↑
+0.8pp ↑
+1.7pp ↑
+1.9pp ↑
-2.3pp ↓
+1.9%
+3.0%
+6.8%
9.4%
+1.2%
+5.5%
-0.1%
+3.4pp ↑
+1.0pp ↑
+12.4pp ↑
+16.7pp ↑
+3.1pp ↑
+16.0pp ↑
+6.1pp ↑
DOMESTIC SERVICE REVENUES
BACK TO POSITIVE IN Q4
broadly stable in FY
GROUP EBITDA GROWTH IN FY
driven by Domestic back to positive
3rd CONSECUTIVE QUARTER OF
DOMESTIC EBITDA GROWTH
FY ‘23 Preliminary Results
15 February 2024 12
OPEX – Flat in FY thanks to Transformation Plan execution, higher revenue-driven costs
offset by increased efficiencies. Q4 down YoY thanks to lower labour and G&A
(1) Net of capitalized costs (2) Includes other costs/provision and other income
TIM Domestic
YoY trend
FY ‘23
DOMESTIC OPEX +2 (+0.0%)
7,680
INTERCONNECTION -6.8%
1,007
EQUIPMENT -12.3%
739
OTHER COGS +23.2%
1,236
COMMERCIAL +5.4%
1,294
INDUSTRIAL +3.8%
1,180
G&A AND IT -6.7%
414
LABOUR (1) -5.8%
1,776
OTHER (2) 34
-1.0pp ↓
-1.3pp ↓
+3.0pp ↑
+0.9pp ↑
+0.6pp ↑
-0.4pp ↓
-1.4pp ↓
-0.3pp ↓
-42.0%
(CASH VIEW) -39 (-0.5%)
Weight on
OPEX trend YoY trend
Q4 ‘23
-57 (-2.6%)
2,165
-6.0%
256
-13.4%
244
+17.3%
413
+0.9%
359
+8.3%
319
-9.4%
110
-13.5%
447
18 -35.4%
-59 (-2.5%)
7.6 7.7 7.7
0.3 1.1
8.0 8.8
FY '21 FY '22 FY '23
TRANSFORMATION PLAN KEY
TO KEEP OPEX OVERALL STABLE
€ bn
Domestic OPEX Transformation Plan
VARIABLE COSTS
up for higher CoGS related to ICT revenues dynamic despite
lower interconnection and equipment
COMMERCIAL COSTS
up for higher Content & Vas (higher multimedia revenues)
and Commissioning (down in cash terms)
INDUSTRIAL COSTS
up for higher energy, industrial spaces and provisioning
despite lower network maintenance costs
G&A & IT
down for lower professional services, utilities and fleet
management
LABOUR
benefitting from solidarity and FTEs reduction
Organic data, IFRS 16, €m
Increase in OPEX
in the inertial scenario
Offset by
Transformation Plan
FY ‘23 Preliminary Results
15 February 2024 13
CAPEX in line with plan. Net Debt lower QoQ thanks to positive EFCF organic
performance and NRRP anticipation
Organic figures(1), IFRS 16 and After Lease, €m
(1) Group CAPEX net of exchange rate fluctuations (average exchange-rate 5.40 R$/€)
606 719 728 1,095
3,148
837 892 916
1,337
3,982
Q1 Q2 Q3 Q4 FY
∆ YoY
GROUP
DOMESTIC
(397) (236) (274)
85
758
843
Q1 Q2 Q3 Q4
TIM Group
55% 59%
12%
14%
3,127 3,148
FY '22 FY '23
Fixed
Mobile
IT
Data Centers
Revenue driven & Other
+0.7%
+15.4%
+9.7%
20,015 21,184 20,349
1,169 ( 835 )
FY '22 9M '23 FY '23
(6)
17
72
68
38
36
-64m in FY
NRRP partial anticipation
CAPEX
ON TRACK
NET DEBT AL
REDUCED
QoQ
EFCF AL
BROADLY
NEUTRAL
IN FY
FY DOMESTIC CAPEX BREAKDOWN
(107)
(100)
(3)
21
Financial and operating results
#2
Closing remarks
#3
Operations update
#1
FY ‘23 Preliminary Results
15 February 2024 15
Closing remarks
TIM Group
2 CONSECUTIVE YEARS OF RESULTS IN LINE OR ABOVE GUIDANCE
DOMESTIC GROWTH TRAJECTORY CONFIRMED
TRANSFORMATION PLAN ON TRACK
>€ 0.7bn NRRP anticipation cashed-in
EFCF AL broadly neutral in FY including NRRP anticipation
Golden Power authorization received for NetCo transaction
Separation activities execution in line with plan
TIM 2024-‘26 PLAN TO BE PRESENTED AT THE CMD ON 7 MARCH
3 consecutive quarters of positive EBITDA
>€ 0.8bn incremental savings vs inertial plan
DELAYERING PLAN
ON TRACK
2023 NRRP MILESTONES ACHIEVED
FY EQUITY FCF AL
TARGET ACHIEVED
DELIVERING
&
DELAYERING
Q&A
Annex
FY ‘23 Preliminary Results
15 February 2024 18
27.2 27.0 27.9 28.1 28.7
1.0% 1.4% 4.8% 4.8% 5.2%
Q4 '22 Q1 '23 Q2 Q3 Q4
Fixed – 3rd consecutive quarter of FSR growth YoY, higher ARPU, churn slightly higher in
Q4 but contained in FY
Organic figures
-0.8%
-1.8%
0.2%
0.6%
3.0%
Q4 '22 Q1 '23 Q2 Q3 Q4
Fixed Service Revenues
Organic figures, YoY trend
Broadband market (4) ARPU Consumer
net of activation fees discontinuity
€/month
∆ YoY
Churn
Net adds
k lines
(1) Wholesale deal with OF in Q3 ‘23 (2) Including ICT revenues generated by TIM Digital Companies (3) Including FiberCop revenues (4) Source: AGCOM
1.1% 1.1%
1.0% 1.0%
1.2%
Q4 '22Q1 '23 Q2 Q3 Q4
-78 -72 -88 -67 -51
25 35 16 19 38
Q4 '22 Q1 '23 Q2 Q3 Q4
-93 -74 -75 -75 -91
45 70 44 22 26
Total lines o/w UBB
Retail
Wholesale
TIM Domestic
flat flat -0.1pp +0.1pp
flat
Fixed revenues
Equipment
Services
o/w retail (2)
o/w Nat. wholesale (3)
o/w Int. wholesale
YoY trend
+3.1%
+5.1%
3.0%
4.7%
1.8%
-5.9%
vs. Q3 ‘23
-2.3pp ↓
n.m. (1)
+2.4pp ↑
+5.7pp ↑
-0.6pp ↓
-9.3pp ↓
Highlights
mainly higher consumer volumes sold YoY
activation fees drag -0.7pp YoY
lower CB, higher ARPU
change in regulated prices
more than offsetting lower customer volumes
decrease in traditional low-margin voice revenues
2,460
219
2,241
1,496
499
241
16% 14%
84% 86%
18,937 18,888
FY '22 Q3 '23
k lines FTTx/FWA
DSL
-49
+478
-527
FY churn flat at 1.1%
∆ YoY
monthly average, %
Q4 ‘23
FY ‘23 Preliminary Results
15 February 2024 19
Mobile - MSR trend still affected by MTR reduction and lower CB YoY. MNPs under
control, higher ARPU, churn contained
TIM Domestic
Churn
monthly average, %
1.1% 1.2%
0.9% 1.0% 1.1%
Q4 '22 Q1 '23 Q2 Q3 Q4
-108
-206
51
-20
-104
-152
-141 -28
-68
-130
Q4 '22 Q1 '23 Q2 Q3 Q4
Total lines o/w human
Net adds
k lines
∆ YoY
-0.1pp flat -0.2pp flat
flat
Market MNP reduced, TIM best performer among MNOs
(126)
k lines
2,022 1,969
-10%
-3%
FY '22 FY '23
ARPU Consumer - Human Calling
net of MTR discontinuity
€/month
11.0 10.9 11.0 11.3 11.4
-0.6% 0.3% 0.0%
1.5%
2.9%
Q4 '22Q1 '23 Q2 Q3 Q4
∆ YoY
Mobile revenues
Equipment
Services
o/w retail
o/w wholesale & other
-9.0%
-29.5%
-4.9%
-1.7%
-21.2%
YoY trend
mainly lower consumer volumes YoY
MTR drag ~1pp YoY
lower CB, ARPU affected by MTR drag
Highlights
-4.5pp ↓
-11.6pp ↓
-2.3pp ↓
+0.6pp ↑
-17.0pp ↓
vs. Q3 ‘23
Organic figures
850
109
741
638
103 lower VISE and wholesale & other (incl. MVNO)
o/w -29k in Q4, -43k in Q3,
+5k in Q2 and -58k in Q1
FY churn flat at 1.1%
Q4 ‘23
FY ‘23 Preliminary Results
15 February 2024 20
Debt maturities (M/L term)
Liquidity
Margin
Liquidity margin - Debt maturities covered until ‘25
TIM Group
€ 4.1bn
refinanced
in 2023
€0.85bn
€0.40bn
€0.36bn
€0.75bn
€0.95bn
€0.75bn
Bond
Tap
EIB financing
Bond
Braz. Debenture
Tap
Jan. ‘23
Apr.
May
Jul.
Sep.
(1) Includes repurchase agreements (€ 0.8bn nominal amount) due in the following 6 months and does not consider € 0.1bn securities pledged against a bank
guarantee (2) € 24.1bn is the nominal amount of outstanding M/L term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1.0bn) and
current financial liabilities (€ 1.4bn), gross debt figure of € 26.4bn is reconciled with reported number (3) Cash-in on Jan. 2nd, 2024 (4) After Lease view (5) Avg. M-
L term maturity 5.2y (bonds 6.0y) (6) Gross debt adjusted (7) ~28% of outstanding bonds (nominal amount) denominated in USD and ~7% in BRL, fully hedged vs
Liquidity margin
covering debt
maturities until ‘25
€ bn, AL view
Cost of debt ~4.9% (4)
+0.3pp QoQ, +1.0pp YoY
~70% M/L term debt
at fixed rate (5)
4.0 2.9
2.2
2.0
1.5
3.2
6.3
18.0
4.7
0.5
1.0
1.1
1.6
0.4
2.0
(0.1)
6.0
9.2
3.8
3.3
3.6
1.9
5.3
6.2 24.1
FY '24 FY '25 FY '26 FY '27 FY '28 Beyond '28 Total
(1)
(2)
Banks
& EIB
27%
Bonds
69%
Derivatives
2%
Other
2%
Gross debt (6)
(7)
Increase in TIM yield broadly aligned to Italy’s BTP
Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24
TIM 5Y mid yield BTP 5Y yield
NRRP financial receivables (3) Bonds Loans
Cash & cash equivalent Undrawn portions of committed bank lines
FY ‘23 Preliminary Results
15 February 2024 21
NRRP financial receivables (3)
Liquidity margin - IFRS 16 view
Cost of debt ~5.4%*, +0.3pp QoQ and +1.0pp YoY
(1) Includes repurchase agreements (€ 0.8bn nominal amount) due in the following 6 months and does not consider € 0.1bn securities pledged against a bank
guarantee (2) € 29.6bn is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€
1.0bn) and current financial liabilities (€ 1.4bn), gross debt figure of € 32.0bn is reconciled with reported number (3) Cash-in on Jan. 2nd, 2024
Liquidity
Margin
Debt Maturities (M/L term)
0.8
0.6
0.6
0.5
0.5
2.5
5.5
4.0 2.9
2.2
2.0
1.5
3.2
6.3
18.0
4.7
0.5
1.0
1.1
1.6
0.4
2.0
(0.1)
6.0
9.2
4.6
3.9
4.1
2.4
5.7
8.8 29.6
Liquidity Margin FY '24 FY '25 FY '26 FY '27 FY '28 Beyond '28 Total
M/L term
(1)
(2)
Bonds Loans
Undrawn portions of committed bank lines
Cash & cash equivalent Finance Leases
* Including cost of all leases
TIM Group
Liquidity margin covering maturities until ‘25
FY ‘23 Preliminary Results
15 February 2024 22
Gross Debt - IFRS 16 view
Well diversified and hedged debt
Gross Debt (3)
Average m/l term maturity:
6.7 years (bonds 6.0 years)
Fixed rate portion on M/L term debt ~75%
~28% of outstanding bonds (nominal amount)
denominated in USD and ~7% in BRL,
fully hedged vs accounting currencies
Banks & EIB
22.7%
Bonds
56.9%
Other
1.7%
Derivatives
1.6%
Op. leases and
long rent
17.1%
(1) Includes debts due to other lenders related to: Factor (€ 222m), Aflac (€ 128m), Brazil 5G (€ 178m) and other (€ 28m) (2) Includes € 488m NRRP financial
receivables (cash-in on Jan. 2nd, 2024) (3) Gross debt adjusted
€ m
TIM Group
NFP
adjusted
Fair
value
NFP
accounting
GROSS DEBT
Bonds 18,423 140 18,563
Banks & EIB 7,407 - 7,407
Derivatives 34 495 529
Leases and long rent 5,581 - 5,581
Other
(1)
556 - 556
TOTAL 32,001 635 32,636
FINANCIAL ASSETS
Liquidity position 4,794 - 4,794
Other 1,551 515 2,066
o/w derivatives 721 515 1,236
o/w active leases 274 - 274
o/w other Credit (2)
556 - 556
TOTAL 6,345 515 6,860
NET FINANCIAL DEBT 25,656 120 25,776
FY ‘23 Preliminary Results
15 February 2024 23
ESG – Q4 findings
TIM Group
E Net Zero (Scope 1+2+3)
E Carbon Neutrality (Scope 1+2)
E Scope 3 Reduction (1)
E Renewable energy on total energy
G Women in leadership position (2)
E Green Products & Smartphones (3)
E Circular Economy ratio (4)
S Cloud, IoT & Security service revenues
S Digital Identity Services (5)
S People trained on ESG skills
S Young Employees Engagement
S FTTH Coverage (% of technical units)
(1) Scope 3 cat.1, 2 and 11, 2019 baseline (2) Women managers, weighted average between Domestic and Brazil targets (≥27% and ≥35% respectively
for ‘23-‘25) (3) Baseline 2021 (4) Average revenues from the resale of used materials and assets plus waste recycling per kg of waste produced
(5) PEC, SPID, Digital Signature (active services)
2040
2030
-47% 2030
100%
2025
≥29%
≥70%
2025
2€/kg
+21% CAGR 23-25
+30% CAGR 23-25
≥90%
≥ 78%
48%
Group targets
Domestic targets
▪ Digital Signature over-performance (+47% certificates)
▪ Acquisition of TS-Way for the prevention and analysis of
cyber attacks
▪ “Italia 1 Giga”: ~255k HHs connected with FTTH in 463
municipalities
▪ Gender pay gap: 53% of women managers received a
~10% average increase in earnings
▪ Certification for Gender Equality achieved (UNI/pdr 125)
▪ Launch of the #Equality can’t wait communication
campaign and of “Women Plus” app to help women in
job search that also offers training and mentoring
▪ More green energy (540 GWh/h) through Purchase
Power Agreements and photovoltaic plants
▪ Lower consumption thanks to the switch-off of obsolete
fixed and mobile assets
▪ >16k modem regenerated, >19k smartphones returned
with trade-in services
Social
Environment
E
S
▪ New Code of Ethics with sustainability as a reference
point of TIM’s long-term strategy
▪ ESG platform to track sustainability data related to
targets, projects and non-financial reporting
Governance
G
2023- ‘25 Plan
Leader in corporate
transparency and
climate change
performance
Platinum Medal as
part of the top 1%
of the best Companies
for ESG performance
World’s leading
telco Company
for diversity and
inclusion policies
Included in the
“S&P’s Sustainability
Yearbook 2024”,
top 10% score
In the "Top 10 of the
Diversity Brand Index"
among the best
Companies for
commitment to D&I
Scope 1: emissions from production (heating, cogeneration, company fleet)
Scope 2: electricity purchase emissions
Scope 3: emissions from upstream and downstream activities of the production chain (cat.1-
purchase of goods; cat.2; capital goods; cat 11-use of goods sold)
(+39) 06 3688 2500
Investor_relations@telecomitalia.it
Further questions
please contact the IR team
UPCOMING EVENT
Capital Market Day 2024
7 March
2024
Website
Gruppotim.it

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TIM GROUP FY '23 Preliminary Results.pdf

  • 2. FY ‘23 Preliminary Results 15 February 2024 2 Disclaimer This presentation contains statements that constitute forward looking statements regarding the intent, belief or current expectations of future growth in the different business lines and the global business, financial results and other aspects of the activities and situation relating to the TIM Group. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward-looking statements as a result of various factors. Consequently, TIM makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward-looking statements. Forward looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but forward-looking information by its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected results. Analysts and investors are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this presentation. The 2023 preliminary financial results of the TIM Group were drafted in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the EU (designated as “IFRS”). The accounting policies and consolidation principles adopted in the preparation of the 2023 preliminary financial results of the TIM Group are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2022, to which reference can be made, except for the amendments to the standards issued by IASB and adopted starting from 1 January, 2023. Please note that the 2023 preliminary financial results of the TIM Group are unaudited. Alternative Performance Measures The TIM Group, in addition to the conventional financial performance measures established by IFRS, uses certain alternative performance measures for the purposes of enabling a better understanding of the performance of operations and the financial position of the TIM Group. In particular, such alternative performance measures include: EBITDA, EBIT, Organic change and impact of non-recurring items on revenue, EBITDA and EBIT; EBITDA margin and EBIT margin; net financial debt (carrying and adjusted amount), Equity Free Cash Flow, Operating Free Cash Flow (OFCF) and Operating Free Cash Flow (net of licences). Moreover, following the adoption of IFRS 16, the TIM Group uses the following additional alternative performance indicators: EBITDA After Lease ("EBITDA-AL"), Adjusted Net Financial Debt After Lease and Equity Free Cash Flow After Lease. Such alternative performance measures are unaudited.
  • 3. Financial and operating results #2 Closing remarks #3 Operations update #1
  • 4. FY ‘23 Preliminary Results 15 February 2024 4 2 years of achievements driven by solid execution TIM Group DELAYERING REFINANCING DELIVERING Q1 ‘22 Q2 Q3 Q4 Q1 ‘23 Q2 Q3 Q4 2022-‘24 Plan approved Jan-Feb. ‘24 Public consultation on 2023 wholesale tariffs 2023 price- ups campaign kick-off ‘Italia 1 Giga’ 7 lots awarded ‘5G Backhauling’ all lots awarded MoU on single network OF commercial agreement Oi mobile acquisition New management team 2022 guidance upgrade Inwit stake disposal NSH awarded 2022- ‘24 labour agreement signed € 2bn SACE loan cashed-in € 0.85bn 5y bond placed € 0.40bn tap € 0.75bn 5y bond placed Initial NBO on NetCo (€ 15.8bn EV) NetCo BO (€18.8bn EV) + Signing Sparkle NBO € 0.36bn EIB financing cashed-in € 0.95bn Braz. Debenture € 0.75bn tap Revised NBO (€ 17.0bn EV) Final NBO (€ 17.9bn EV) Golden Power authorization received Sparkle offer CEO mandated to negotiate further >€ 0.7bn NRRP anticipation cashed-in DAZN agreement renewed ESG - Carbon Disclosure Project “A” rating received
  • 5. FY ‘23 Preliminary Results 15 February 2024 5 Delivered 2 consecutive years of guidance for the 1st time since 2010-‘11 LSD = Low-Single Digit; MSD = Mid-Single Digit; LMSD = Low-to-Mid Single Digit (1) Group figures @ average exchange-rate 5.44 R$/€ in ‘22 and 5.40 R$/€ in ‘23 (2) Upgraded in Aug. ‘22 TIM Group Organic YoY performance (1) SERVICE REVENUES o/w Domestic EBITDA o/w Domestic EBITDA AL LSD decrease HSD decrease (2) Low teens decrease (2) ACHIEVED ✓ Broadly stable LSD growth Flat to LSD growth MSD growth LMSD growth ACHIEVED ✓ ACHIEVED ✓ ACHIEVED ✓ 2022-‘23 GUIDANCE ACHIEVED ON ALL METRICS CAPEX o/w Domestic € 4.1bn € 3.2bn € 4.0bn ACHIEVED ✓ € 3.1bn 2022 2023 ACHIEVED ✓ ACHIEVED ✓ ACHIEVED ✓
  • 6. FY ‘23 Preliminary Results 15 February 2024 6 DOMESTIC EBITDA GROWTH for the 3rd consecutive quarter Clear growth trajectory of Domestic trends (1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation TIM Domestic Q3 Q4 Q2 Q1 ‘23 Q3 Q4 Q2 Q1 ‘22 -5.3% -4.8% -3.5% -1.5% -2.4% -0.9% -0.6% 1.2% -18.3% -16.3% -16.2% -4.2% -2.8% 0.5% 3.6% 5.5% -20.4% -18.0% -18.0% -5.2% -3.5% 0.1% 3.4% 5.3% SERVICE REVENUES EBITDA EBITDA AL DOMESTIC SERVICE REVENUES BACK TO POSITIVE after 22 quarters Organic YoY performance (1)
  • 7. FY ‘23 Preliminary Results 15 February 2024 7 1.7% 1.6% FY '22 FY '23 1.1% 1.1% FY '22 FY '23 1.4% 4.8% 4.8% 5.2% Q1 Q2 Q3 Q4 0.3%0.0% 1.5% 2.9% Q1 Q2 Q3 Q4 TIM Entities delivered results (1/2) TIM Group (1) FTTH market share TIM 25.9% vs Op.2 18.5%, Op.3 18.5%, Op.4 17.4% and Others 19.6% (Source: AGCOM, data as of Sep. ‘23) (2) Net of SPC Cloud; +7% YoY reported Connectivity -2% Cloud (2) +31% Other IT +13% Security +11% IoT +24% TIM CONSUMER (CO+SMB) REVENUES -4.7% ✓IMPROVED SERVICE REVENUE TREND AND ARPU successful repricing campaign both on fixed and mobile, limited impact on churn ✓CONFIRMED FTTH LEADERSHIP highest market share for the 6th consecutive quarter (1) ✓NRRP: 5G COVERAGE TARGET OVER-ACHIEVED 152 areas covered (109% of YE target achieved) ARPU net of activation fees Δ YoY ARPU human calling, net of MTR Δ YoY ✓SERVICE REVENUES GROWTH ABOVE MARKET AVERAGE FOR THE 2nd CONSECUTIVE YEAR ✓CONSOLIDATED CLOUD LEADERSHIP ~€ 1bn revenues from Cloud products and services, hyper performing DCs, >2k certifications ✓>40K DEALS CLOSED IN 2023 12-month value of contracts signed +33% YoY ✓STRONG PIPELINE up to ~€ 1.5bn from ongoing negotiations -5.6% -4.9% -3.4% -3.2% Q1 Q2 Q3 Q4 ∆YoY SERVICES -4.2% CHURN monthly average CHURN monthly average CONSUMER FIXED CONSUMER MOBILE REVENUES +4.6% SERVICES +5.1% ∆YoY TIM ENTERPRISE FY ‘23, organic YoY performance, TIM Consumer and TIM Enterprise revenues and service revenues consistent with July 2022 disclosure CHANGE IN REVENUE MIX
  • 8. FY ‘23 Preliminary Results 15 February 2024 8 TIM Entities delivered results (2/2) TIM Group (1) FTTH market share TIM 25.9% (Source: AGCOM, data as of Sep. ‘23) REVENUES +10.7% ✓ STRONG OPERATIONAL PERFORMANCE ✓ 2023 GUIDANCE OVER-DELIVERED SERVICES +10.8% EBITDA (1) +14.7% CAPEX 18.9% on revenues EBITDA AL – CAPEX (1) +62.1% HSD = High Single Digit; LDD = Low Double Digit; DD = Double Digit (1) Net non-recurring items (2) EBITDA AL net non-recurring items - CAPEX (3) Overall FTTH coverage, including NRRP and “Eurosud” ✓ ✓ ✓ ✓ ✓ REVENUES EBITDA (1) CAPEX EBITDA AL-CAPEX (1) SHAREHOLDERS REMUNERATION HSD growth LDD growth <20% on revenues DD growth >2.9bn R$ REVENUES +3.7% SERVICES -0.2% FTTH COVERAGE (technical units, million) (3) 7.8 9.2 32% 38% FY '22 FY '23 FTTX COVERAGE >95% of active lines ~63% >100Mbps ✓ FTTH ROLL-OUT ON TRACK fiber migration and technology upgrade ongoing ✓ DELIVERED ON NRRP ROLL-OUT MILESTONES MOBILE TIM BRASIL NETCO FY ‘23, organic YoY performance, NetCo revenues and service revenues consistent with July 2022 disclosure MARKET SHARE 77% on TIM network Italia 1 Giga ~76% of YE target achieved ~255k HHs connected 5G Backhauling ~106% of YE target achieved ~3.6k sites connected ~1.2k sites passed Delay mainly due to lack of specialized workforce in Sardinia, no risk of penalties Further acceleration of execution expected ACCESSES 15.5m, >70% FTTx HIGHEST EVER OPERATING FCF (2) 4.2bn R$ 17.5% of net revenues EBITDA MARGIN (1) 48.7% 61.2m lines ARPU +13.1% YoY MSR +11.2% YoY
  • 9. FY ‘23 Preliminary Results 15 February 2024 9 Transformation plan execution on track, ~€ 0.8bn additional savings achieved in ‘23 TIM Domestic (1) Cumulated savings vs. inertial plan (2) On 2021 restated cost baseline (€ 4.8bn) TARGET SAVINGS (€bn) (1) o/w OPEX savings (2) o/w cash cost / CAPEX extra-savings 2022 2023 2024 0.3 0.3 - 1.1 0.7 0.4 1.5 1.0 0.5 ~€ 0.8bn additional savings in 2023 106% of incremental FY target achieved Real Estate & Energy ▪ Optimized management of 200k sqm premises by leveraging home working & Friday closure by contractual agreement IT ▪ Licensing cost optimized through contracts revision (>90 contracts terminated or renegotiated YTD) ▪ IT spending governance strengthened through the set-up of a dedicated committee, ITC spend optimization and systematic review of >120 business plans Customer care ▪ Customer Care spend reduced 6% YoY thanks to lower human volumes (-18% YoY), increased productivity, make vs buy mix review, near-shoring and digital features upgrade Highlights 2023 key contributors Labour ▪ Hourly reduction, >70% of HCs involved, achieving >4k FTEs reduction ▪ Voluntary exits, ~0.6k HCs (~115% of FY target) ▪ Early retirements, >2.5k HCs (~109% of FY target) ▪ Skill Remix, ~0.5k HCs recruited (~113% of FY target) Decommissioning ▪ Energy savings from 3G switch-off and dismantling of obsolete network elements (e.g. exchanges equipment) ▪ Public Payphones, ~14k dismantled HR & Corporate ▪ Insourcing, completed 2nd wave and involved during the year ~1.1k employees across >100 different roles ▪ Travel expenses contained at same level of ‘22 despite COVID restriction (~27% below the 2023 initial budget) ▪ SMS fraudulent traffic prevention through new detection tools, SMS cap and reduction of off-net grey routes (-31pp YoY)
  • 10. Financial and operating results #2 Closing remarks #3 Operations update #1
  • 11. FY ‘23 Preliminary Results 15 February 2024 11 Key financials (1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation area. Group figures @ average exchange-rate 5.40 R$/€ Organic data (1), IFRS 16 and After Lease (AL), €m and YoY trend TIM Group FY ‘23 vs. Q3 ‘23 Q4 ‘23 vs. FY ‘22 REVENUES o/w Domestic SERVICE REVENUES o/w Domestic EBITDA o/w Domestic EBITDA AL FY GROUP REVENUES BACK TO GROWTH improvement on Domestic, continued growth in Brazil 16,296 14,953 6,383 5,304 10,721 4,242 11,922 +3.1% +2.3% +5.7% +6.1% -0.7% +1.7% +0.6% -1.8pp ↓ +1.4pp ↑ +0.3pp ↑ +0.8pp ↑ +1.7pp ↑ +1.9pp ↑ -2.3pp ↓ +1.9% +3.0% +6.8% 9.4% +1.2% +5.5% -0.1% +3.4pp ↑ +1.0pp ↑ +12.4pp ↑ +16.7pp ↑ +3.1pp ↑ +16.0pp ↑ +6.1pp ↑ DOMESTIC SERVICE REVENUES BACK TO POSITIVE IN Q4 broadly stable in FY GROUP EBITDA GROWTH IN FY driven by Domestic back to positive 3rd CONSECUTIVE QUARTER OF DOMESTIC EBITDA GROWTH
  • 12. FY ‘23 Preliminary Results 15 February 2024 12 OPEX – Flat in FY thanks to Transformation Plan execution, higher revenue-driven costs offset by increased efficiencies. Q4 down YoY thanks to lower labour and G&A (1) Net of capitalized costs (2) Includes other costs/provision and other income TIM Domestic YoY trend FY ‘23 DOMESTIC OPEX +2 (+0.0%) 7,680 INTERCONNECTION -6.8% 1,007 EQUIPMENT -12.3% 739 OTHER COGS +23.2% 1,236 COMMERCIAL +5.4% 1,294 INDUSTRIAL +3.8% 1,180 G&A AND IT -6.7% 414 LABOUR (1) -5.8% 1,776 OTHER (2) 34 -1.0pp ↓ -1.3pp ↓ +3.0pp ↑ +0.9pp ↑ +0.6pp ↑ -0.4pp ↓ -1.4pp ↓ -0.3pp ↓ -42.0% (CASH VIEW) -39 (-0.5%) Weight on OPEX trend YoY trend Q4 ‘23 -57 (-2.6%) 2,165 -6.0% 256 -13.4% 244 +17.3% 413 +0.9% 359 +8.3% 319 -9.4% 110 -13.5% 447 18 -35.4% -59 (-2.5%) 7.6 7.7 7.7 0.3 1.1 8.0 8.8 FY '21 FY '22 FY '23 TRANSFORMATION PLAN KEY TO KEEP OPEX OVERALL STABLE € bn Domestic OPEX Transformation Plan VARIABLE COSTS up for higher CoGS related to ICT revenues dynamic despite lower interconnection and equipment COMMERCIAL COSTS up for higher Content & Vas (higher multimedia revenues) and Commissioning (down in cash terms) INDUSTRIAL COSTS up for higher energy, industrial spaces and provisioning despite lower network maintenance costs G&A & IT down for lower professional services, utilities and fleet management LABOUR benefitting from solidarity and FTEs reduction Organic data, IFRS 16, €m Increase in OPEX in the inertial scenario Offset by Transformation Plan
  • 13. FY ‘23 Preliminary Results 15 February 2024 13 CAPEX in line with plan. Net Debt lower QoQ thanks to positive EFCF organic performance and NRRP anticipation Organic figures(1), IFRS 16 and After Lease, €m (1) Group CAPEX net of exchange rate fluctuations (average exchange-rate 5.40 R$/€) 606 719 728 1,095 3,148 837 892 916 1,337 3,982 Q1 Q2 Q3 Q4 FY ∆ YoY GROUP DOMESTIC (397) (236) (274) 85 758 843 Q1 Q2 Q3 Q4 TIM Group 55% 59% 12% 14% 3,127 3,148 FY '22 FY '23 Fixed Mobile IT Data Centers Revenue driven & Other +0.7% +15.4% +9.7% 20,015 21,184 20,349 1,169 ( 835 ) FY '22 9M '23 FY '23 (6) 17 72 68 38 36 -64m in FY NRRP partial anticipation CAPEX ON TRACK NET DEBT AL REDUCED QoQ EFCF AL BROADLY NEUTRAL IN FY FY DOMESTIC CAPEX BREAKDOWN (107) (100) (3) 21
  • 14. Financial and operating results #2 Closing remarks #3 Operations update #1
  • 15. FY ‘23 Preliminary Results 15 February 2024 15 Closing remarks TIM Group 2 CONSECUTIVE YEARS OF RESULTS IN LINE OR ABOVE GUIDANCE DOMESTIC GROWTH TRAJECTORY CONFIRMED TRANSFORMATION PLAN ON TRACK >€ 0.7bn NRRP anticipation cashed-in EFCF AL broadly neutral in FY including NRRP anticipation Golden Power authorization received for NetCo transaction Separation activities execution in line with plan TIM 2024-‘26 PLAN TO BE PRESENTED AT THE CMD ON 7 MARCH 3 consecutive quarters of positive EBITDA >€ 0.8bn incremental savings vs inertial plan DELAYERING PLAN ON TRACK 2023 NRRP MILESTONES ACHIEVED FY EQUITY FCF AL TARGET ACHIEVED DELIVERING & DELAYERING
  • 16. Q&A
  • 17. Annex
  • 18. FY ‘23 Preliminary Results 15 February 2024 18 27.2 27.0 27.9 28.1 28.7 1.0% 1.4% 4.8% 4.8% 5.2% Q4 '22 Q1 '23 Q2 Q3 Q4 Fixed – 3rd consecutive quarter of FSR growth YoY, higher ARPU, churn slightly higher in Q4 but contained in FY Organic figures -0.8% -1.8% 0.2% 0.6% 3.0% Q4 '22 Q1 '23 Q2 Q3 Q4 Fixed Service Revenues Organic figures, YoY trend Broadband market (4) ARPU Consumer net of activation fees discontinuity €/month ∆ YoY Churn Net adds k lines (1) Wholesale deal with OF in Q3 ‘23 (2) Including ICT revenues generated by TIM Digital Companies (3) Including FiberCop revenues (4) Source: AGCOM 1.1% 1.1% 1.0% 1.0% 1.2% Q4 '22Q1 '23 Q2 Q3 Q4 -78 -72 -88 -67 -51 25 35 16 19 38 Q4 '22 Q1 '23 Q2 Q3 Q4 -93 -74 -75 -75 -91 45 70 44 22 26 Total lines o/w UBB Retail Wholesale TIM Domestic flat flat -0.1pp +0.1pp flat Fixed revenues Equipment Services o/w retail (2) o/w Nat. wholesale (3) o/w Int. wholesale YoY trend +3.1% +5.1% 3.0% 4.7% 1.8% -5.9% vs. Q3 ‘23 -2.3pp ↓ n.m. (1) +2.4pp ↑ +5.7pp ↑ -0.6pp ↓ -9.3pp ↓ Highlights mainly higher consumer volumes sold YoY activation fees drag -0.7pp YoY lower CB, higher ARPU change in regulated prices more than offsetting lower customer volumes decrease in traditional low-margin voice revenues 2,460 219 2,241 1,496 499 241 16% 14% 84% 86% 18,937 18,888 FY '22 Q3 '23 k lines FTTx/FWA DSL -49 +478 -527 FY churn flat at 1.1% ∆ YoY monthly average, % Q4 ‘23
  • 19. FY ‘23 Preliminary Results 15 February 2024 19 Mobile - MSR trend still affected by MTR reduction and lower CB YoY. MNPs under control, higher ARPU, churn contained TIM Domestic Churn monthly average, % 1.1% 1.2% 0.9% 1.0% 1.1% Q4 '22 Q1 '23 Q2 Q3 Q4 -108 -206 51 -20 -104 -152 -141 -28 -68 -130 Q4 '22 Q1 '23 Q2 Q3 Q4 Total lines o/w human Net adds k lines ∆ YoY -0.1pp flat -0.2pp flat flat Market MNP reduced, TIM best performer among MNOs (126) k lines 2,022 1,969 -10% -3% FY '22 FY '23 ARPU Consumer - Human Calling net of MTR discontinuity €/month 11.0 10.9 11.0 11.3 11.4 -0.6% 0.3% 0.0% 1.5% 2.9% Q4 '22Q1 '23 Q2 Q3 Q4 ∆ YoY Mobile revenues Equipment Services o/w retail o/w wholesale & other -9.0% -29.5% -4.9% -1.7% -21.2% YoY trend mainly lower consumer volumes YoY MTR drag ~1pp YoY lower CB, ARPU affected by MTR drag Highlights -4.5pp ↓ -11.6pp ↓ -2.3pp ↓ +0.6pp ↑ -17.0pp ↓ vs. Q3 ‘23 Organic figures 850 109 741 638 103 lower VISE and wholesale & other (incl. MVNO) o/w -29k in Q4, -43k in Q3, +5k in Q2 and -58k in Q1 FY churn flat at 1.1% Q4 ‘23
  • 20. FY ‘23 Preliminary Results 15 February 2024 20 Debt maturities (M/L term) Liquidity Margin Liquidity margin - Debt maturities covered until ‘25 TIM Group € 4.1bn refinanced in 2023 €0.85bn €0.40bn €0.36bn €0.75bn €0.95bn €0.75bn Bond Tap EIB financing Bond Braz. Debenture Tap Jan. ‘23 Apr. May Jul. Sep. (1) Includes repurchase agreements (€ 0.8bn nominal amount) due in the following 6 months and does not consider € 0.1bn securities pledged against a bank guarantee (2) € 24.1bn is the nominal amount of outstanding M/L term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1.0bn) and current financial liabilities (€ 1.4bn), gross debt figure of € 26.4bn is reconciled with reported number (3) Cash-in on Jan. 2nd, 2024 (4) After Lease view (5) Avg. M- L term maturity 5.2y (bonds 6.0y) (6) Gross debt adjusted (7) ~28% of outstanding bonds (nominal amount) denominated in USD and ~7% in BRL, fully hedged vs Liquidity margin covering debt maturities until ‘25 € bn, AL view Cost of debt ~4.9% (4) +0.3pp QoQ, +1.0pp YoY ~70% M/L term debt at fixed rate (5) 4.0 2.9 2.2 2.0 1.5 3.2 6.3 18.0 4.7 0.5 1.0 1.1 1.6 0.4 2.0 (0.1) 6.0 9.2 3.8 3.3 3.6 1.9 5.3 6.2 24.1 FY '24 FY '25 FY '26 FY '27 FY '28 Beyond '28 Total (1) (2) Banks & EIB 27% Bonds 69% Derivatives 2% Other 2% Gross debt (6) (7) Increase in TIM yield broadly aligned to Italy’s BTP Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 TIM 5Y mid yield BTP 5Y yield NRRP financial receivables (3) Bonds Loans Cash & cash equivalent Undrawn portions of committed bank lines
  • 21. FY ‘23 Preliminary Results 15 February 2024 21 NRRP financial receivables (3) Liquidity margin - IFRS 16 view Cost of debt ~5.4%*, +0.3pp QoQ and +1.0pp YoY (1) Includes repurchase agreements (€ 0.8bn nominal amount) due in the following 6 months and does not consider € 0.1bn securities pledged against a bank guarantee (2) € 29.6bn is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1.0bn) and current financial liabilities (€ 1.4bn), gross debt figure of € 32.0bn is reconciled with reported number (3) Cash-in on Jan. 2nd, 2024 Liquidity Margin Debt Maturities (M/L term) 0.8 0.6 0.6 0.5 0.5 2.5 5.5 4.0 2.9 2.2 2.0 1.5 3.2 6.3 18.0 4.7 0.5 1.0 1.1 1.6 0.4 2.0 (0.1) 6.0 9.2 4.6 3.9 4.1 2.4 5.7 8.8 29.6 Liquidity Margin FY '24 FY '25 FY '26 FY '27 FY '28 Beyond '28 Total M/L term (1) (2) Bonds Loans Undrawn portions of committed bank lines Cash & cash equivalent Finance Leases * Including cost of all leases TIM Group Liquidity margin covering maturities until ‘25
  • 22. FY ‘23 Preliminary Results 15 February 2024 22 Gross Debt - IFRS 16 view Well diversified and hedged debt Gross Debt (3) Average m/l term maturity: 6.7 years (bonds 6.0 years) Fixed rate portion on M/L term debt ~75% ~28% of outstanding bonds (nominal amount) denominated in USD and ~7% in BRL, fully hedged vs accounting currencies Banks & EIB 22.7% Bonds 56.9% Other 1.7% Derivatives 1.6% Op. leases and long rent 17.1% (1) Includes debts due to other lenders related to: Factor (€ 222m), Aflac (€ 128m), Brazil 5G (€ 178m) and other (€ 28m) (2) Includes € 488m NRRP financial receivables (cash-in on Jan. 2nd, 2024) (3) Gross debt adjusted € m TIM Group NFP adjusted Fair value NFP accounting GROSS DEBT Bonds 18,423 140 18,563 Banks & EIB 7,407 - 7,407 Derivatives 34 495 529 Leases and long rent 5,581 - 5,581 Other (1) 556 - 556 TOTAL 32,001 635 32,636 FINANCIAL ASSETS Liquidity position 4,794 - 4,794 Other 1,551 515 2,066 o/w derivatives 721 515 1,236 o/w active leases 274 - 274 o/w other Credit (2) 556 - 556 TOTAL 6,345 515 6,860 NET FINANCIAL DEBT 25,656 120 25,776
  • 23. FY ‘23 Preliminary Results 15 February 2024 23 ESG – Q4 findings TIM Group E Net Zero (Scope 1+2+3) E Carbon Neutrality (Scope 1+2) E Scope 3 Reduction (1) E Renewable energy on total energy G Women in leadership position (2) E Green Products & Smartphones (3) E Circular Economy ratio (4) S Cloud, IoT & Security service revenues S Digital Identity Services (5) S People trained on ESG skills S Young Employees Engagement S FTTH Coverage (% of technical units) (1) Scope 3 cat.1, 2 and 11, 2019 baseline (2) Women managers, weighted average between Domestic and Brazil targets (≥27% and ≥35% respectively for ‘23-‘25) (3) Baseline 2021 (4) Average revenues from the resale of used materials and assets plus waste recycling per kg of waste produced (5) PEC, SPID, Digital Signature (active services) 2040 2030 -47% 2030 100% 2025 ≥29% ≥70% 2025 2€/kg +21% CAGR 23-25 +30% CAGR 23-25 ≥90% ≥ 78% 48% Group targets Domestic targets ▪ Digital Signature over-performance (+47% certificates) ▪ Acquisition of TS-Way for the prevention and analysis of cyber attacks ▪ “Italia 1 Giga”: ~255k HHs connected with FTTH in 463 municipalities ▪ Gender pay gap: 53% of women managers received a ~10% average increase in earnings ▪ Certification for Gender Equality achieved (UNI/pdr 125) ▪ Launch of the #Equality can’t wait communication campaign and of “Women Plus” app to help women in job search that also offers training and mentoring ▪ More green energy (540 GWh/h) through Purchase Power Agreements and photovoltaic plants ▪ Lower consumption thanks to the switch-off of obsolete fixed and mobile assets ▪ >16k modem regenerated, >19k smartphones returned with trade-in services Social Environment E S ▪ New Code of Ethics with sustainability as a reference point of TIM’s long-term strategy ▪ ESG platform to track sustainability data related to targets, projects and non-financial reporting Governance G 2023- ‘25 Plan Leader in corporate transparency and climate change performance Platinum Medal as part of the top 1% of the best Companies for ESG performance World’s leading telco Company for diversity and inclusion policies Included in the “S&P’s Sustainability Yearbook 2024”, top 10% score In the "Top 10 of the Diversity Brand Index" among the best Companies for commitment to D&I Scope 1: emissions from production (heating, cogeneration, company fleet) Scope 2: electricity purchase emissions Scope 3: emissions from upstream and downstream activities of the production chain (cat.1- purchase of goods; cat.2; capital goods; cat 11-use of goods sold)
  • 24. (+39) 06 3688 2500 Investor_relations@telecomitalia.it Further questions please contact the IR team UPCOMING EVENT Capital Market Day 2024 7 March 2024 Website Gruppotim.it