Telecom Italia S.p.A. · MIL:TIT
Telecom Italia — FY2009 Earnings Presentation
30 slides from Telecom Italia's earnings presentation, Apr 13, 2010
Slide 1: Telecom Italia Group 2009 Results (Full Package)
Telecom Italia Group 2009 Results (Full Package)
Slide 2: Safe Harbour
Safe Harbour These presentations contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current
Slide 3: Agenda
Agenda TI Group Main Achievements Focus on Domestic Business Focus on TIM Brasil Appendix 2
Slide 4: TI Group FY09 Progress Report
TI Group FY09 Progress Report Operating Free Cash Flow: 6.3 bln € (+12% YoY) Focus on TARGET REACHED Core Organic Domestic Ebitda: 10.1bln € (-2.1% YoY) Organic Ebitda Margin: 46.5% (+2.3 p.p. YoY) Markets: Domestic TARGET REACHED & Domestic Cash Cost Efficiencies: 0.9 bln € 2009 DPS Brazil Ord.: 5.
Slide 5: Improved Operating Free Cash Flow
Improved Operating Free Cash Flow Euro mln, Reported data Operating FCF % OFCF on Revenues +662 6,298 23.2% 5,636 +3.8 p.p. 19.4% 2008 2009 2008 2009 Figures considering HanseNet classified as Discontinued Operations. 4
Slide 6: TI Group Improved Profitability: Organic Results vs. 2008
TI Group Improved Profitability: Organic Results vs. 2008 Revenues EBITDA Euro mln, Organic data, % % on Revenues 41.7% +2.2 p.p. 39.5% -1,625 mln € -52 mln € 28,805 -5.6% 11,379 -0.5% 11,327 27,180 IVQ 7,686 -9.1% IVQ 2,733 -0.7% 2,713 6,986 IIIQ 7,174 -5.6% IIIQ 3,002 -0.4% 2,990 6,770 IIQ 7,165 I
Slide 7: Cash Cost Control: a Group-Wide Commitment
Cash Cost Control: a Group-Wide Commitment Organic OPEX 2009 EBITDA Margin Euro mln, Organic data, % Δ abs. vs. Δ %. vs. Δ %. 9M09 vs. 2008 2008 9M08 2008 2009 46.5% 44.2% +2.3 p.p. Domestic 11,605 -1,372 -10.6% -8.4% 25.7% TIM 23.4% +2.3 p.p. Brasil 3,733 -127 -3.3% -2.0% -3.9% +13.5 p.p. TI Media
Slide 8: Group Cash Cost Control to improve Operating Cash Flow
Group Cash Cost Control to improve Operating Cash Flow Euro mln, Organic data, % TI Group Cash Cost Domestic Cash Cost -1,593 -7.2% Of which: -1,507 -9.1% Domestic -1,372 Brazil -127 21,989 20,396 16,635 15,128 CAPEX (*) 4,563 -0.4% CAPEX 3,658 4,543 -20 -3.7% 3,523 -135 OPEX 17,426 -9.0% 15,853 -1,
Slide 9: Main achievements 2009 – Progress on Cash Cost Rationalization
Main achievements 2009 – Progress on Cash Cost Rationalization Euro mln, Organic data, % Cash Cost Focus on Efficiency Program 71.5% % on Rev. -1.7 p.p. 69.8% o/w Opex Handsets 16,635 -453 Mobile: -378 Total 896 632 -896 0,0 -158 15,128 1 Network Operations 264 25 -1,507 Sales & 2 Distribution 311 3
Slide 10: Net Income Evolution
Net Income Evolution Euro mln 11,327 (212) 11,115 (5,622) HanseNet GW Writedown/Provisions (597) HanseNet Net Income (23) (2,154) (2) Other provisions 3,339 (1,121) (622) (15) 1,581 EBITDA Non Organic EBITDA Deprec. / Net Interest & Income Taxes Net Income Minorities Net Income Organic Items Reporte
Slide 11: Agenda
Agenda TI Group Main Achievements Focus on Domestic Business Focus on TIM Brasil Appendix 10
Slide 12: Domestic – Steady Cost Control Offsetting Revenues Decline
Domestic – Steady Cost Control Offsetting Revenues Decline Euro mln, Organic data, % Revenues EBITDA % on Revenues -1,583 mln € +2.3 p.p. 46.5% 44.2% 23,262 23,262 -6.8% 21,679 -211 mln € -11.3% 10,285 -2.1% 10,074 Mobile 9,687 Service revenues 8,597 -8.1% IVQ 2,372 -2.8% 2,306 IIIQ 2,687 -0.4% 2,67
Slide 13: Domestic Fixed – TI Access Performance
Domestic Fixed – TI Access Performance ‘000 access Telecom Italia Retail Access Evolution & Line Losses Key Highlights ‘000 17,352 16,972 16,621 Lowest line losses level since third quarter 16,358 16,097 2007 through successful retention activities TI Access and new integrated/bundled offers 4Q08 1Q
Slide 14: Domestic Fixed: Focus on BB & ICT
Domestic Fixed: Focus on BB & ICT Broadband Market Italian ICT Market (Top Clients) ‘000 Euro bln -6.7% Total Italian BB accesses 11,164 11,968 12,294 7.5 +79 7.0 TI retail 6,754 6,843 6,859 6,921 7,000 accesses 11.4% Free TI Market +2.2 p.p. Share on ICT 9.2% Revenues Flat (%) 77% 79% 81% 81% 83% 4
Slide 15: Domestic Mobile - 2009 Main Facts
Domestic Mobile - 2009 Main Facts Customer Base Mobile Mobile BB –Revenues** mln SIM Euro mln -4% calling* 34.8 -11% 652 30.9 +19.6% 545 2008 2009 2008 2009 (*) SIM Human that generate/receive calls/browsing in the last 30 days (**) Revenues normalized excluding promotion related to device sales Key
Slide 16: Domestic Mobile Revenues
Domestic Mobile Revenues Euro mln FY 08 FY 09 Δ % YoY Total 9,687 8,597 (11.3) = Handsets 860 482 (44.0) (3.9) + Outgoing 4,969 4,583 (7.8) (4.0) Voice + Business 1,684 1,511 (10.3) (1.8) Received * + VAS 2,173 2,022 (6.9) (1.6) (*) Incoming, Visiting and Other Revenues 15
Slide 17: Agenda
Agenda TI Group Main Achievements Focus on Domestic Business Focus on TIM Brasil Appendix 16
Slide 18: TIM Brasil FY09 - Main Achievements
TIM Brasil FY09 - Main Achievements Most innovative Brand on the Market: more than 20 million Infinity clients in 9 months Recovery of Brand and Improved Top of Mind and Customer Satisfaction Index in all Consumer Premium Segments Positioning and Quality recovery 100% of Anatel Network Quality targe
Slide 19: TIM Brasil - Main Organic Results
TIM Brasil - Main Organic Results Revenues Service Revenues Euro mln, % -15M€ Euro mln, % -6M€ 5,037 -0.3% 5,022* 4,646 -0.1% 4,640* IVQ 1,449 -3.7% 1,400 1.318 1.334 IVQ +1.4% IIIQ 1,336 -1.2% 1,323 1.217 1.218 IIIQ +0.1% IIQ 1,198 +3.4% 1,238 IIQ 1.115 1.097 -1.6% IQ 1,054 +0.7% 1,061 IQ 996 991 -
Slide 20: Agenda
Agenda TI Group Main Achievements Focus on Domestic Business Focus on TIM Brasil Appendix 19
Slide 21: Focus on TI Sparkle Provision
FY Focus on TI Sparkle Provision Euro mln 2005-2007 Revenues and Commercial Margin TI Sparkle Provision 2005-2009 Restatement FY ’07: 70 Commercial FY ’06: 256 Revenues Margin FY ’05: 77 72 32 507 Cum. 403 ’07-’05 -1,246 -72 FY ‘07 -169 -13 FY ‘06 -754 -47 VAT* Commercial Interests Total FY ‘05 -323
Slide 22: Focus on TI Sparkle Provision: Breakdown
FY Focus on TI Sparkle Provision: Breakdown RESTATEMENT CUM. 2005 2006 2007 2008 2009 Euro mln 2005-2009 Revenues (323) (754) (169) 0 0 (1,246) Ebitda (89) (303) (83) 0 0 (475) Ebit (89) (303) (83) 0 0 (475) Interests 0 (4) (8) (10) (10) (32) Net Income (post Minorities) (89) (307) (91) (10) (10) (5
Slide 23: Revenues Evolution
FY Revenues Evolution Euro mln Media (69) Bolivia (52) Elimination +63 29,000 (58) (161) +24 28,805 (1,583) (15) +12 (1) (38) 27,180 (17) 27,163 Domestic +11 Brazil (171) Organic Variation Olivetti (1) FY 09 -1,625 (-5.6%) FY08 Change in Exchange Other non FY08 Domestic Mobile (*) Media Olivetti Oth
Slide 24: EBITDA Evolution
FY EBITDA Evolution Euro mln Mobility under Law 223/91 related to Reduction Plan announced on June 4th 2008 +292 Agreement with OLO and provisions for legal disputes +34 Agreement with OLO and provisions Other + 3 for legal disputes (154) Media +21 Agreement with OLO in Brazil (22) Bolivia (24) Othe
Slide 25: EBIT Evolution
FY EBIT Evolution Euro mln Mobility under Law 223/91 related to Reduction Plan announced on June 4th 2008 +292 Agreement with OLO and provisions for legal Agreement with OLO and provisions disputes +34 for legal disputes (154) Gain on Real Estate disposal and PPV disposal (34) Loss on disposal and i
Slide 26: Net Debt Dynamics
FY Net Debt Dynamics Euro mln +1,839 Income Taxes +248 Tax Litigation +214 Substitutive Tax o/w +2,225 Cash Financial Expenses +52 Disc. Ops. HanseNet (206) Financial Accruals 34,039 +487 34,526 (6,298) +798 34,747 +1,050 +65 +339 33,949 +2,019 +2,301 (53) (577) +708 2008YE Adj. for 2008YE Operating
Slide 27: Group Liquidity Matches 2010 – 2011 Maturities
FY Group Liquidity Matches 2010 – 2011 Maturities Euro mln Bonds Loans (of which long-term rent, financial and operating lease payable 1,797 € mln) Drawn bank facility € 7.3 bln Group Liquidity Position + 16,807 40,890 * € 6.5 bln 3,000 Undrawn Portion of € 8 bln Facility 12,755 1H 2H = Bonds 2,356
Slide 28: TI Group – Profit and Loss by Quarters - Reported
FY TI Group – Profit and Loss by Quarters - Reported I Quarter II Quarter III Quarter IV Quarter Full Year 2009 2008 Δ Abs Δ % 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% Euro mln REVENUES 6.527 6.996 (469) (6,7) 6.897 7.251 (354) (4,9) 6.764 7.273 (509) (7,0) 6.975 7
Slide 29: TI Group - Main Results by BU - by Quarter - Reported
FY TI Group - Main Results by BU - by Quarter - Reported Euro mln I Quarter II Quarter III Quarter IV Quarter Full Year 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% REVENUES Domestic 5.357 5.600 -243 (4,3) 5.534 5.791 -257 (4,4) 5.342 5.728 -386 (6,7
Slide 30: TI Group - Main Results by BU - by Quarter - Organic
FY TI Group - Main Results by BU - by Quarter - Organic Euro mln I Quarter II Quarter III Quarter IV Quarter Full Year 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% 2009 2008 Δ Abs Δ% REVENUES Domestic 5.357 5.607 -250 (4,5) 5.534 5.821 -287 (4,9) 5.348 5.731 -383 (6,7)