Telecom Italia S.p.a. · MIL:TIT
Telecom Italia — H1 2012 Earnings Presentation
26 slides from Telecom Italia's earnings presentation, Aug 2, 2012
Slide 1: Telecom Italia 1H 2012 Results
TELECOM ITALIA GROUP 1H 2012 Results Milan, August 2nd, 2012 Telecom Italia 1H 2012 Results FRANCO BERNABE’
Slide 2: Safe Harbour
TELECOM ITALIA GROUP 1H 2012 Results 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 re
Slide 3: Agenda
TELECOM ITALIA GROUP 1H 2012 Results Agenda TI Group 1H12 Results Telecom Italia Core Markets Results Italy Brazil Argentina Financial Position and Wrap-up Appendix FRANCO BERNABE’ 2
Slide 4: TI Group: Revenues & EBITDA trends
TELECOM ITALIA GROUP 1H 2012 Results TI Group: Revenues & EBITDA trends Euro mln, YoY% Reported Revenues Organic Revenues +250 M€ +443 M€ +1.7% 14,793 +3.1% 14,802 14,543 14,359 7,470 -69 7,401 7,340 +70 7,410 2Q -0.9% 2Q +1.0% +319 +373 1Q 7,073 +4.5% 7,392 1Q 7,019 +5.3% 7,392 1H11 1H12 1H11 1H12
Slide 5: Net Income Evolution
TELECOM ITALIA GROUP 1H 2012 Results Net Income Evolution Euro mln +105 (+9.2%) Domestic (34) Brazil (19) Argentina (133) Argentina (8) Brazil (91) T.I.Media 8 T.I. Media 10 +57 (55) +86 +11 1,460 (215) 221 1,361 1,245 1,140 Equity +8 Income from inv. (15) o/w Cuba (17) Net Fin
Slide 6: Free Cash Flow Generation Remains Strong
TELECOM ITALIA GROUP 1H 2012 Results Free Cash Flow Generation Remains Strong Euro mln, Reported Data Operating Free Cash Flow Net Cash Flow +250 Revenues 14,543 14,793 Cuba: 386 (295) Economics Interest TA (155) Opex (8,587) (347) (8,934) 349 231 Etecsa Cuba: 25 TIM Fiber: (9) (232) (152) Ha
Slide 7: Net Debt Evolution
TELECOM ITALIA GROUP 1H 2012 Results Net Debt Evolution Euro mln, Reported Data Net Debt Dynamics Adj. Net Financial Position (759) 30,414 (2,243) 1,180 30,360 1,027 (18) 31,119 EBITDA (5,859) CAPEX +2,269 30,414 30,360 WC & Others +1,347 Operating FCF (2,243) (705) (2.4 € bln) Normalized* (
Slide 8: Agenda
TELECOM ITALIA GROUP 1H 2012 Results Agenda TI Group 1H12 Results Telecom Italia Core Markets Results Italy Brazil Argentina Financial Position and Wrap-up Appendix FRANCO BERNABE’ 7
Slide 9: Italy: Revenues & EBITDA Trends
TELECOM ITALIA GROUP 1H 2012 Results Italy: Revenues & EBITDA Trends Euro mln, Organic Data, YoY % Revenues Improvement in complex conditions 9,339 -282 M€ -3.0% 9,057 Sound trend on a normalized basis: - 3.0% YoY in 2Q12 vs – 3.4% YoY in 1Q12, despite business segment results heavily -173 2Q 4,75
Slide 10: New EC Regulation: Stable Prices on Copper Access and a more suitable NGN Wholesale Pricing Environment
TELECOM ITALIA GROUP 1H 2012 Results New EC Regulation: Stable Prices on Copper Access and a more suitable NGN Wholesale Pricing Environment Europe Telecom Italia The EC issued a clear statement of how it plans to TI’s wholesale copper service income will stabilize regulate copper and fibre unti
Slide 11: Agenda
TELECOM ITALIA GROUP 1H 2012 Results Agenda TI Group 1H12 Results Telecom Italia Core Markets Results Italy Brazil Argentina Financial Position and Wrap-up Appendix FRANCO BERNABE’ 10
Slide 12: Brazil: Revenues & EBITDA Trends
TELECOM ITALIA GROUP 1H 2012 Results Brazil: Revenues & EBITDA Trends Euro mln, Organic Data, YoY% Revenues Size & Market +419M€ +12.6% 3,733 3,314 TIM Brasil confirmed as #2 operator with around 69 million lines (about 1.7 million added in the Quarter) +110 1,805 2Q 1,695 Market Share on Net Ad
Slide 13: Agenda
TELECOM ITALIA GROUP 1H 2012 Results Agenda TI Group 1H12 Results Telecom Italia Core Markets Results Italy Brazil Argentina Financial Position and Wrap-up Appendix FRANCO BERNABE’ 12
Slide 14: Argentina: Revenues & EBITDA Trends
TELECOM ITALIA GROUP 1H 2012 Results Argentina: Revenues & EBITDA Trends Euro mln, Organic Data, YoY% Revenues Size +315 M€ +20.9% 1,823 #1 Mobile Operator in revenues share 1,508 Sound growth in Mobile Market: @ 18.7 mln clients +141 922 +18.1% Fixed Business: still solid performance in BB net a
Slide 15: Agenda
TELECOM ITALIA GROUP 1H 2012 Results Agenda TI Group 1H12 Results Telecom Italia Core Markets Results Italy Brazil Argentina Financial Position and Wrap-up Appendix FRANCO BERNABE’ 14
Slide 16: Financial Position and Wrap-Up
TELECOM ITALIA GROUP 1H 2012 Results Financial Position and Wrap-Up Cash Flow Generation on Track Deleverage to Proceeds according to Plan * Euro Bln In excess of Euro 1bln 2Q12 Group Dividend net cash-out entirely financed from Operations 2012-14 targets 1H12 YoY lower Working Capital absorptio
Slide 17: Agenda
TELECOM ITALIA GROUP 1H 2012 Results Agenda TI Group 1H12 Results Telecom Italia Core Markets Results Italy Brazil Argentina Financial Position and Wrap-up Appendix FRANCO BERNABE’ 16
Slide 18: Telecom Italia Group – FY 2012 and 2012-14 Plan Key Guidance
TELECOM ITALIA GROUP 1H 2012 Results Telecom Italia Group – FY 2012 and 2012-14 Plan Key Guidance Organic Data* TI Group – FY 2012 Key Guidance Revenues Stable EBITDA Broadly Stable NFP Adj.** 27.5 € bln Organic Data* TI Group – 2012-14 Plan Key Guidance ** EBITDA-Capex >22 € bln cum ’12-’14 Capex
Slide 19: TI Group – Revenues Evolution
TELECOM ITALIA GROUP 1H 2012 Results TI Group – Revenues Evolution Euro mln +250 (+1.7%) Domestic +9 Litigation & Brazil (185) Settlement (9) Argentina (3) (5) (179) +315 +1 (19) +9 14,802 (9) 14,793 14,543 0 14,359 (282) +419 Domestic (5) Olivetti (12) Other & Elim. +12 Organic Variation +44
Slide 20: TI Group – EBITDA Evolution
TELECOM ITALIA GROUP 1H 2012 Results Litigations & Settlement (12) Other items (6) TI Group – EBITDA Evolution Headcount reduction (Olivetti) (16) Euro mln -97 (-1.6%) 5,956 0 (48) +44 5,952 (150) +45 (25) (21) 5,893 (34) +89 +3 5,859 Litigations & Settlement +8 Other items +36 Domestic 3 Bra
Slide 21: TI Group – Ebit Evolution
TELECOM ITALIA GROUP 1H 2012 Results TI Group – Ebit Evolution Euro mln +3,268 Litigations & Settlement (12) GW Writedown +3,182 Other items +15 Litigations & Settlement +8 Headcount reduction (Olivetti) (16) Other items +35 +49 (2) (26) +2 (18) 3,218 (13) +71 3,205 +3,225 3,142 42.4% 21.9% 21
Slide 22: Robust Liquidity Margin and Well-Distributed Debt Maturities
TELECOM ITALIA GROUP 1H 2012 Results Robust Liquidity Margin and Well-Distributed Debt Maturities Euro mln Bonds Loans (of which long-term rent, financial and operating lease payable € 1,460) Drawn bank facility € 6.63 bln 14,065 36,341(*) Group Liquidity Position 2,249 + € 7.00 bln Undrawn Portion
Slide 23: Well Diversified and Hedged Debt
TELECOM ITALIA GROUP 1H 2012 Results Well Diversified and Hedged Debt Total Gross Debt Net of Adjustment: Euro 38,429 mln Maturities and Risk Management Euro mln Op. Leases and long rent Bank & EIB 1,475 5,748 Bank Facility Average debt maturity: 7.24 years Other 3.8% 15.0% 2,116 2,206 (bond only 8
Slide 24: TI Group 1H12 Results - P&L
TELECOM ITALIA GROUP 1H 2012 Results TI Group 1H12 Results - P&L Euro mln – Reported Data I Half 2012 2011 Abs. % REVENUES 14,793 14,543 250 1.7% Other Operating Income 108 108 TOTAL REVENUES & OTHER INCOME 14,901 14,651 250 1.7% Total Purchases of materials and external services -6,500 -6,232 -2
Slide 25: TI Group 1H12 – Main Results by BU
TELECOM ITALIA GROUP 1H 2012 Results TI Group 1H12 – Main Results by BU Euro mln I Half I Half Reported Organic 2012 2011 Abs. % 2012 2011 Abs. % REVENUES REVENUES Domestic 9,048 9,335 -287 (3.1) Domestic 9,057 9,339 -282 (3.0) Wireline Domestic 6,468 6,664 -196 (2.9) Wireline Domestic 6,477 6
Slide 26: Focus on Delta Operating Working Capital
TELECOM ITALIA GROUP 1H 2012 Results Focus on Delta Operating Working Capital Euro mln, Reported Data Delta Operating Working Capital (impact on 1H12 Cash Flow) Net Other Severance OWC Trade Trade Receivables/ Indemnities, & Other Inventories Receivables * Payables* Payables* Funds & Other 1H12 (