Telecom Italia S.p.A. · MIL:TIT
Telecom Italia — 9M 2010 Earnings Presentation
27 slides from Telecom Italia's earnings presentation, Nov 4, 2010
Slide 1: Telecom Italia 9M 2010 Results
TELECOM ITALIA GROUP 9M 2010 Results Milan, November 4th, 2010 Telecom Italia 9M 2010 Results FRANCO BERNABE’
Slide 2: Safe Harbour
TELECOM ITALIA GROUP 9M 2010 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 9M 2010 Results Agenda TI Group Main Achievements International Presence Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 2
Slide 4: TI Group 9M10 Key Financial Achievements
TELECOM ITALIA GROUP 9M 2010 Results TI Group 9M10 Key Financial Achievements Group Revenues Trend Reported -0.5% YoY; Organic -4.9% YoY Focus on Group EBITDA: Reported -0.6% YoY, Organic -0.8% YoY Core Markets: Cash Cost Control: Domestic Domestic Cash Cost -1.2€ BLN, -11.0% YoY (-12.2% in 3Q) & Ne
Slide 5: Agenda
TELECOM ITALIA GROUP 9M 2010 Results Agenda TI Group Main Achievements International Presence Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 4
Slide 6: LATAM is the Place to be
TELECOM ITALIA GROUP 9M 2010 Results LATAM is the Place to be Worldwide Mobile Market(1) Revenues p.a. Bln US$ 163.6 89.8 72 30.4 29.1 29.9 26.4 26.3 6.6 14.6 % YoY +14% +13% +12% +10% +5% +2% +0% -1% -3% -3% TI International Presence Reported Data €, Reported Data Mobile Lines Revenues 17% 17% 9% S
Slide 7: Telecom Argentina: Macro-economic and TLC overview
TELECOM ITALIA GROUP 9M 2010 Results Telecom Argentina: Macro-economic and TLC overview Macro-economic Scenario (1) Real GDP Consumption Trade&Fiscal Balance Billion ARS, 1993 based prices, ∆% YoY Billion ARS, 1993 based prices, ∆ % YoY Trade Balance (BLN USD) Last 12 months 419 422 407 266 269 271
Slide 8: Telecom Argentina: Overview
TELECOM ITALIA GROUP 9M 2010 Results Telecom Argentina: Overview ARS mln, % - Argentine GAAP 9M10 9M09 % YoY FY09 FY08 % YoY Revenues 10,484 8,861 +18.3% 12,226 10,608 +15.3% Opbda 3,282 2,855 +15.0% 3,900 3,330 +17.1% Opbda Margin 31.3% 32.2% 31.9% 31.4% Net Income 1,309 1,006 +30.1% 1,405 961 +46.
Slide 9: Agenda
TELECOM ITALIA GROUP 9M 2010 Results Agenda TI Group Main Achievements International Presence Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 8
Slide 10: TI Group: Reported & Organic Results
TELECOM ITALIA GROUP 9M 2010 Results TI Group: Reported & Organic Results Euro mln, % Reported Revenues Organic Revenues -96 -1,025 -0.5% 20,924 -4.9% 19,995 19,899 19,899 +2 6,986 -310 3Q 6,674 +0.0% 6,676 3Q -4.4% 6,676 -33 -384 2Q 6,843 -0.5% 6,810 2Q 7,194 -5.3% 6,810 1Q -65 1Q -331 6,478 -1.0%
Slide 11: Domestic Revenues and EBITDA Trend
TELECOM ITALIA GROUP 9M 2010 Results Domestic Revenues and EBITDA Trend Euro mln, Organic Data, % Revenues -1,215M€ Service revenues -6.4% 16,247 -7.5% 15,032 Mobile -10.4% 6,496 Service revenues 5,822 -8.2% EBITDA -4.2% Wireline 10,977 Service revenues 10,516 % on 49.8% -3.9% Revenues 47.8% +2.0 p.
Slide 12: Domestic - Progress on Cash Cost Rationalization
TELECOM ITALIA GROUP 9M 2010 Results Domestic - Progress on Cash Cost Rationalization Euro mln, Organic Data, % Cash Cost € Mln -1,194 % of FY10 Efficiency 10,897 (255) -686 Target (253) (263) (423) 9,703 74% Handsets: -216 4Q10 Efficiency Plan Opex 8,486 € Mln -936 7,550 90% % of FY10 Efficiency Ta
Slide 13: TIM Brasil: Organic Main Results & KPIs
TELECOM ITALIA GROUP 9M 2010 Results TIM Brasil: Organic Main Results & KPIs Euro mln, Organic Data, % Revenues Key KPIs Service revenues +5.9% +151M€ Customer base grew 19% Year-on-Year and 4,347 +3.5% 4,498 reached 46.9 million customers: TIM Brasil +6.1% number 1 in Q3 marginal market share (40
Slide 14: Agenda
TELECOM ITALIA GROUP 9M 2010 Results Agenda TI Group Main Achievements International Presence Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 13
Slide 15: TI Group – Upside in Net Income
TELECOM ITALIA GROUP 9M 2010 Results TI Group – Upside in Net Income Euro mln, Reported Data % on Revenues 8,475 (4,171) 9.1% 5.8% 4,304 (1,501) 9M 09 9M 10 2,803 (899) (2) (83) 1,819 EBITDA Deprec / EBIT Net Interest & Income Taxes Disc. Op. Minorities Net Income Reported Amortiz.* Reported Net Inc
Slide 16: Operating and Net Cash Flow Dynamics
TELECOM ITALIA GROUP 9M 2010 Results Operating and Net Cash Flow Dynamics Euro mln, Reported Data Operating Free Cash Flow Net Cash Flow +1,531 964 3,932 -92 Mln 3,840 Normalized 389 Sparkle 382 Settlement Hansenet: 810 Sparkle: (428)(*) 582 3,451 Reported Normalized -481 Mln +1,149 (567) 9M09 9
Slide 17: Net Debt Evolution
TELECOM ITALIA GROUP 9M 2010 Results Net Debt Evolution Euro mln, Reported Data Adjusted Net Financial Position +567 35,093 34,526 (964) 33,949 32,985 (2,108) (577) FY08 9M09 FY09 9M10 FRANCO BERNABE’ 16
Slide 18: Agenda
TELECOM ITALIA GROUP 9M 2010 Results Agenda TI Group Main Achievements International Presence Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 17
Slide 19: Cost Control: a Group-Wide Commitment
TELECOM ITALIA GROUP 9M 2010 Results Cost Control: a Group-Wide Commitment Euro mln, Organic Data, % Organic OPEX 2010 EBITDA Margin ∆ abs. vs. ∆ %. vs. ∆ %. 1H10 vs. 2009 2009 1H09 9M09 9M10 49.8% Domestic 7,550 -936 -11.0% -11.2% 47.8% +2.0 p.p. TIM 28.5% Brasil 3,217 -49 -1.5% -3.3% 24.9% +3.6 p.
Slide 20: TI Group – Revenues Evolution
TELECOM ITALIA GROUP 9M 2010 Results TI Group – Revenues Evolution Euro mln Brazil +192 Media (3) Elim. +1 +733 +6 20,924 (1,215) +151 +18 +40 (19) 19,899 19,995 +190 0 19,899 Brazil +726 Domestic +7 Organic Variation 9M10 -1,025 (-4.9%) 9M09 Change in Exchange Other non 9M09 Domestic Mobile Me
Slide 21: TI Group – EBITDA Evolution
TELECOM ITALIA GROUP 9M 2010 Results TI Group – EBITDA Evolution Euro mln Headcount Reduction Costs (240) Brazil +15 Litigation (5) Media +1 Other (27) Olivetti (1) 8,526 +15 +188 +88 8,817 (279) +200 +15 (5) (1) 8,747 (272) 8,475 Domestic +2 Brazil +186 Organic Variation 42.6% 42.1% 9M10 44
Slide 22: TI Group – EBIT Evolution
TELECOM ITALIA GROUP 9M 2010 Results TI Group – EBIT Evolution Euro mln Headcount Reduction Costs (240) Brazil (24) Litigation (5) Media +2 Other (10) Olivetti (1) +137 4,433 (102) +215 +14 (4) +3 4,559 (255) 4,293 (23) +26 4,304 Domestic +1 Brazil +25 Organic Variation 21.5% 21.2% 9M10 22.9
Slide 23: Net Debt Dynamics
TELECOM ITALIA GROUP 9M 2010 Results Net Debt Dynamics Euro mln, Reported Data (8,475) Ebitda +1,501 Cash Financial Expenses +2,938 Capex (123) Financial Accruals +2,086 ∆WC & Others 33,949 (3,451) + 706 (658) +1,061 32,985 +1,378 (964) 2009YE Operating Cash Financ. Dividends Cash Other 9M
Slide 24: Even Back-Loaded Maturities
TELECOM ITALIA GROUP 9M 2010 Results Even Back-Loaded Maturities Euro mln Bonds Loans (of which long-term rent, financial and operating lease payable € 1,695) Drawn bank facility 15,221 37,721(1) 1,500 € 5.1 bln Group Liquidity Position + 12,646 € 7.75 bln Undrawn Portion of Facility = € 12.9 bln 2,
Slide 25: TI Group 9M10 Results – P&L
TELECOM ITALIA GROUP 9M 2010 Results TI Group 9M10 Results – P&L Euro mln I Half III Quarter September YTD 2010 2009 ∆ Abs ∆% 2010 2009 ∆ Abs ∆% 2010 2009 ∆ Abs ∆% REVENUES 13,223 13,321 (98) (0.7) 6,676 6,674 2 0.0 19,899 19,995 (96) (0.5) Other Operating Income 104 115 (11) (9.6) 56 68 (12) (17.6)
Slide 26: TI Group – Main Results by BU – Reported Figures
TELECOM ITALIA GROUP 9M 2010 Results TI Group – Main Results by BU – Reported Figures Euro mln I Half III Quarter September YTD 2010 2009 ∆ Abs ∆% 2010 2009 ∆ Abs ∆% 2010 2009 ∆ Abs ∆% REVENUES Domestic 10,091 10,892 -801 (7.4) 4,941 5,342 -401 (7.5) 15,032 16,234 -1,202 (7.4) Wireline Domestic 7,05
Slide 27: TI Group – Main Results by BU – Organic Figures
TELECOM ITALIA GROUP 9M 2010 Results TI Group – Main Results by BU – Organic Figures Euro mln I Half III Quarter September YTD 2010 2009 ∆ Abs ∆% 2010 2009 ∆ Abs ∆% 2010 2009 ∆ Abs ∆% REVENUES Domestic 10,091 10,893 -802 (7.4) 4,941 5,354 -413 (7.7) 15,032 16,247 -1,215 (7.5) Wireline Domestic 7,058