Telecom Italia S.p.A. · MIL:TIT

Telecom Italia — Q1 2012 Earnings Presentation

26 slides from Telecom Italia's earnings presentation, May 10, 2012

  1. Slide 1: Telecom Italia 1Q 2012 Results

    TELECOM ITALIA GROUP 1Q 2012 Results Milan, May 10th, 2012 Telecom Italia 1Q 2012 Results FRANCO BERNABE’

  2. Slide 2: Safe Harbour

    TELECOM ITALIA GROUP 1Q 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

  3. Slide 3: Agenda

    TELECOM ITALIA GROUP 1Q 2012 Results Agenda  TI Group 1Q12 Results  Telecom Italia Core Markets Results Italy Brazil Argentina  Wrap-up  Appendix FRANCO BERNABE’ 2

  4. Slide 4: TI Group Key Results

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group Key Results Euro mln, Organic data, % Revenues EBITDA % on 42.0% Revenues -1.9 p.p. 40.1% +373 M€ 7,392 2,951 +15 M€ 2,966 7,019 +5.3% +0.5% 1Q11 1Q12 1Q11 1Q12 Revenues Trend YoY EBITDA-CAPEX % on 29.3% -2.1 p.p. Revenues 27.2% 5.3% 5.0% -43 M€ 3.7% 2,0

  5. Slide 5: TI Group Key Results by Core Markets

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group Key Results by Core Markets Euro mln, Organic Data Weight on TI Group TI Group Domestic Brazil Argentina 1Q12 % yoy 1Q12 % yoy 1Q12 % yoy 1Q12 % yoy Revenues 7,392 +5.3% 4,486 -2.4% 1,928 +19.1% 901 +24.0% 60.4% 26.0% 12.2% 38.2% EBITDA 2,966 +0.5% 2

  6. Slide 6: TI Media: Corporate Re-organization leading to Disposal

    TELECOM ITALIA GROUP 1Q 2012 Results Tl Media: Corporate Re-organization leading to Disposal Current Structure Post Re-organization 77.7% 77.7% TI Media MTV Italia Broadcasting (51%) NewCo (100%) MTV Adv. 51% 100% (100%) FRANCO BERNABE’ 5

  7. Slide 7: Debt Reduction Progressing as per Planned Sequence

    TELECOM ITALIA GROUP 1Q 2012 Results Debt Reduction Progressing as per Planned Sequence Euro mln, Reported Data 30,414 (626) 7 89 30,312 (10) 438  EBITDA (2,963)  CAPEX +954   WC & Others +1,383  Operating FCF (626) (102) 2011YE Operating FCF Disposals Cash Financial Expenses/ Financial Cash Ta

  8. Slide 8: Free Cash Flow Generation: in line with Targets

    TELECOM ITALIA GROUP 1Q 2012 Results Free Cash Flow Generation: in line with Targets Operating Free Cash Flow Guidance OFCF FY12E Euro mln, Reported Data Euro bln FY2011 1Q12 FY2012E +319 7,392 Stable Revenues 7,073 TI Group 7.0* ~7.0* 0.6 4,144 4,429 Opex -285 Breakdown Domestic 5.8* 1.2 Capex 901

  9. Slide 9: Net Income Evolution

    TELECOM ITALIA GROUP 1Q 2012 Results Net Income Evolution Euro mln +57 (+10.4%) Brazil (34) Argentina (9) Argentina (76) Domestic (18) Brazil (43) T.I. Media +5 +15 (61) 720 +114 (114) 103 652 606 549 Equity +1 Income from inv. (17) Net Fin. Charges +31 Net Income 1Q11 Minorities Income ante Min  M

  10. Slide 10: Agenda

    TELECOM ITALIA GROUP 1Q 2012 Results Agenda  TI Group 1Q12 Results  Telecom Italia Core Markets Results Italy Brazil Argentina  Wrap-up  Appendix FRANCO BERNABE’ 9

  11. Slide 11: Italy: Continued Resilience in a Weak Macro Context

    TELECOM ITALIA GROUP 1Q 2012 Results Italy: Continued Resilience in a Weak Macro Context Real GDP trend Consumer Spending 0.0% 0.0% -2.5% -2.5% -5.0% -5.0% 4Q11A 1Q12A 2Q12E 3Q12E 4Q12E 4Q11A 1Q12A 2Q12E 3Q12E 4Q12E Source: Research Dep. Intesa Sanpaolo Source: Research Dep. Intesa Sanpaolo Wireless

  12. Slide 12: Agenda

    TELECOM ITALIA GROUP 1Q 2012 Results Agenda  TI Group 1Q12 Results  Telecom Italia Core Markets Results Italy Brazil Argentina  Wrap-up  Appendix FRANCO BERNABE’ 11

  13. Slide 13: Brazil: Revenues and EBITDA Trend

    TELECOM ITALIA GROUP 1Q 2012 Results Brazil: Revenues and EBITDA Trend Euro mln, Organic Data Revenues Size +309 M€  TIM Brazil confirmed as #2 operator, with service +19.1% 1,928 revenues up 15.9% YoY 1,619  Postpaid users increased to about 10 mln (+25% YoY) Revenue Growth 1Q11 1Q12  Top line g

  14. Slide 14: Agenda

    TELECOM ITALIA GROUP 1Q 2012 Results Agenda  TI Group 1Q12 Results  Telecom Italia Core Markets Results Italy Brazil Argentina  Wrap-up  Appendix FRANCO BERNABE’ 13

  15. Slide 15: Argentina: Revenues and EBITDA Trend

    TELECOM ITALIA GROUP 1Q 2012 Results Argentina: Revenues and EBITDA Trend Euro mln, Organic Data, % Revenues Size +174 M€  Argentina: Personal #1 in Mobile Revenue Share +24.0% 901  Steady growth in fixed BB accesses (+1% QoQ) 727 Revenue Growth  Personal: strong VAS Revenue growth still driven b

  16. Slide 16: Agenda

    TELECOM ITALIA GROUP 1Q 2012 Results Agenda  TI Group 1Q12 Results  Telecom Italia Core Markets Results Italy Brazil Argentina  Wrap-up  Appendix FRANCO BERNABE’ 15

  17. Slide 17: Telecom Italia Group – FY 2012 and 2012-14 Plan Key Guidance

    TELECOM ITALIA GROUP 1Q 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

  18. Slide 18: Agenda

    TELECOM ITALIA GROUP 1Q 2012 Results Agenda  TI Group 1Q12 Results  Telecom Italia Core Markets Results Italy Brazil Argentina  Wrap-up  Appendix FRANCO BERNABE’ 17

  19. Slide 19: TI Group – Revenues Evolution

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group – Revenues Evolution Euro mln +319 (+4.5%) +174 +6 (13) +6 7,392 0 7,392 7,073 (3) (51) 0 7,019 (109) +309 Domestic +2 Brazil (27) Argentina (26) Domestic Olivetti (3) (6) Organic Variation Other & Elim. +6 +373 (+5.3%) 1Q11 Change in Exchange Othe

  20. Slide 20: TI Group – EBITDA Evolution

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group – EBITDA Evolution Euro mln +34 (+1.2%) Agreements and Transactions +6 Agreements and Transactions (1) Other net costs +31 Other net costs (2) 2,929 0 (15) +37 2,951 (78) +60 +41 (8) 0 0 2,966 (3) 2,963 Domestic 1 Brazil (7) Argentina (9) 41.4% 42

  21. Slide 21: TI Group – EBIT Evolution

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group – EBIT Evolution Euro mln +114 (+7.6%) +56 +17 (8) +1 1,622 (3) 1,619 1,534 +22 0 1,505 0 (8) +37 Brazil (4) Argentina (4) Organic Variation 22.0% 21.4% +88 (+5.7%) 21.7% 21.2% 1Q11 Change in Exchange Other non 1Q11 Domestic Brazil* Argentina** Media O

  22. Slide 22: Robust Liquidity Margin and Well-Distributed Debt Maturities

    TELECOM ITALIA GROUP 1Q 2012 Results Robust Liquidity Margin and Well-Distributed Debt Maturities Euro mln Bonds Loans (of which long-term rent, financial and operating lease payable € 1,497) Drawn bank facility € 6.16 bln 13,323 35,884 (*) Group Liquidity Position 2,249 + € 7.00 bln Undrawn Portion

  23. Slide 23: Well Diversified and Hedged Debt

    TELECOM ITALIA GROUP 1Q 2012 Results Well Diversified and Hedged Debt Total Gross Debt Net of Adjustment: Euro 37,513 mln Maturities and Risk Management Euro mln Op. Leases and long rent Bank & EIB 1,512 5,734 Bank Facility Average debt maturity: 7.32 years (bond Other 4.0% 15.3% 2,248 only 8.38 ye

  24. Slide 24: TI Group 1Q12 Results - P&L

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group 1Q12 Results - P&L Euro mln – Reported Data I Quarter 2012 2011  Abs. % REVENUES 7,392 7,073 319 4.5% Other Operating Income 52 48 4 TOTAL REVENUES & OTHER INCOME 7,444 7,121 323 4.5% Total Purchases of materials and external services -3,231 -2,995 -23

  25. Slide 25: TI Group 1Q12 – Main Results by BU

    TELECOM ITALIA GROUP 1Q 2012 Results TI Group 1Q12 – Main Results by BU Euro mln I Quarter I Quarter Reported Organic 2012 2011  Abs. % 2012 2011  Abs. % REVENUES REVENUES Domestic 4,486 4,596 -110 (2.4) Domestic 4,486 4,595 -109 (2.4) Wireline Domestic 3,235 3,331 -96 (2.9) Wireline Domestic 3,

  26. Slide 26: Focus on Working Capital

    TELECOM ITALIA GROUP 1Q 2012 Results DRAFT Focus on Working Capital Euro mln, Reported Data Operating Working Capital (impact on 1Q12 Cash Flow) Net Other  Severance OWC Trade Trade Receivables/ Indemnities, & Other Inventories Receivables Payables Payables Funds & Other 1Q12 -48 +118 -1,014 -443

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