Telecom Italia S.p.A. · MIL:TIT
Telecom Italia — Q1 2010 Earnings Presentation
24 slides from Telecom Italia's earnings presentation, May 6, 2010
Slide 1: Telecom Italia 1Q 2010 Results
TELECOM ITALIA GROUP 1Q 2010 Results Milan, May 6th, 2010 Telecom Italia 1Q 2010 Results FRANCO BERNABE’
Slide 2: Safe Harbour
TELECOM ITALIA GROUP 1Q 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 1Q 2010 Results Agenda TI Group Main Achievements Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 2
Slide 4: TI Group 1Q10 Key Financial Achievements
TELECOM ITALIA GROUP 1Q 2010 Results TI Group 1Q10 Key Financial Achievements Improved Group Revenues Trend Reported -0.7% YoY; Organic -4.7% YoY Focus on Core Group EBITDA Stabilization: Markets: Reported +3.2% YoY, Organic +0.1% YoY Domestic Continued Cash Cost Control: & Domestic Cash Cost -0.4BN
Slide 5: Improved TI Group Profitability: Reported & Organic Results
TELECOM ITALIA GROUP 1Q 2010 Results Improved TI Group Profitability: Reported & Organic Results Euro mln, % Revenues Reported Revenues Organic -44 -323 -0.7% 6,806 -4.7% 6,483 6,527 6,483 1Q09 1Q10 1Q09 1Q10 EBITDA Reported EBITDA Organic % on 43.6% 43.7% Revenues +1.6p.p. % on +2.1 p.p. 42.0% Reve
Slide 6: Group Cash Cost Control to improve Cash Generation
TELECOM ITALIA GROUP 1Q 2010 Results Group Cash Cost Control to improve Cash Generation Euro mln, Organic data, % TI Group Cash Cost Domestic Cash Cost -263 -5.3% o/w -384 -10.5% Brazil +148 4,952 4,689 3,649 3,265 CAPEX 979 +6.4% 1,042 CAPEX 833 -9.7% +63 752 -81 OPEX 3,973 -8.2% 3,647 -326 OPEX 2,
Slide 7: Agenda
TELECOM ITALIA GROUP 1Q 2010 Results Agenda TI Group Main Achievements Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 6
Slide 8: Domestic – Signs of Mobile Recovery
TELECOM ITALIA GROUP 1Q 2010 Results Domestic – Signs of Mobile Recovery Euro mln, Organic data, % Revenues Key Highlights Service revenues -380 -6.5% Fixed business: 5,354 -7.1% Broadband: strong pick-up of “Tutto Compreso” 4,974 offering -7.4% Mobile 2,059 Service revenues 1,907 Good value for mon
Slide 9: Domestic Main Achievements 2010 – Progress on Cash Cost Rationalization
TELECOM ITALIA GROUP 1Q 2010 Results Domestic Main Achievements 2010 – Progress on Cash Cost Rationalization Euro mln, Organic data, % Cash Cost Focus on Efficiency Program Target 1Q10 68.2% % on Rev.: -2.6 p.p. 65.6% FY 10 % on 3,649 -100 Target FY : - 925 925 Target: 236 -236 Total 26% 0,0 -48 3,2
Slide 10: Agenda
TELECOM ITALIA GROUP 1Q 2010 Results Agenda TI Group Main Achievements Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 9
Slide 11: TIM Brasil: Solid Commercial KPI’s
TELECOM ITALIA GROUP 1Q 2010 Results TIM Brasil: Solid Commercial KPI’s Customer Base MOU %, Mln lines, EoP Minutes/line/month Customer +17.3% 42.4 Base 100 36.1 +42% +6.9% 6.6 18 Post-paid 6.2 Total 70 -20% +19.5% +70% Pre-paid 35.8 15 Incoming 22 29.9 10 5 82 0 Outgoing 48 1Q09 1Q10 1Q09 1Q10 Mark
Slide 12: TIM Brasil: Organic Main Results
TELECOM ITALIA GROUP 1Q 2010 Results TIM Brasil: Organic Main Results Euro mln, Organic data, % Revenues Key Highlights +47 +3.5% Strong positive impact on Top Line of TIM Brasil 1,345 1,392 “breaking the rule” approach Significant growth of traffic volume turning into positive voice revenues perfor
Slide 13: TIM Brasil: Take Aways
TELECOM ITALIA GROUP 1Q 2010 Results TIM Brasil: Take Aways Focus on fundamentals: Quality and Innovation A Better Improved sales force productivity: +17% YoY Customer Base and reverted Net Adds trend in Post Paid (voice), with lower SAC Company Re-shaped traffic to core business, with better contri
Slide 14: Agenda
TELECOM ITALIA GROUP 1Q 2010 Results Agenda TI Group Main Achievements Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 13
Slide 15: Net Income Evolution
TELECOM ITALIA GROUP 1Q 2010 Results Net Income Evolution Euro mln, Reported Data 2,826 (1,418) 1,408 (447) 961 (355) (5) 601 EBITDA Deprec / EBIT Net Interest & Income Taxes Minorities Net Income Reported Amortiz.* Reported Net Income Before Taxes /Equity & Disc.Ops. Δ vs. 1Q 2009 +3.2% +2.4% +4.0%
Slide 16: Net Debt Dynamics
TELECOM ITALIA GROUP 1Q 2010 Results Net Debt Dynamics Euro mln, Reported Data ► +637 Cash Financial Expenses ► (204) Financial Accruals 33,949 (754) 33,262 (853) +433 +282 +205 (687) 2009YE Operating Hansenet Cash Financial Seized Other 1Q10 Expenses/ Adjusted FCF Financial amount for Impacts Adjus
Slide 17: Agenda
TELECOM ITALIA GROUP 1Q 2010 Results Agenda TI Group Main Achievements Operating Performance Domestic Business TIM Brasil Financial Performance Appendix FRANCO BERNABE’ 16
Slide 18: Cost Control: a Group-Wide Commitment
TELECOM ITALIA GROUP 1Q 2010 Results Cost Control: a Group-Wide Commitment Organic OPEX 2010 EBITDA Margin Euro mln, Organic data, % Δ abs. vs. Δ %. vs. Δ %. 1Q09 vs. 2009 2009 1Q08 1Q09 1Q10 49.5% 47.4% +2.1 p.p. Domestic 2,513 -303 -10.8% -4.5% 27.4% TIM 23.0% +4.4 p.p. Brasil 1,011 -25 -2.4% -4.4
Slide 19: Revenues Evolution
TELECOM ITALIA GROUP 1Q 2010 Results Revenues Evolution Euro mln Brazil +59 Media (2) 6,527 +222 0 6,806 (380) +2 0 6,483 0 6,483 +57 +47 +8 Brazil +225 Domestic (3) Organic Variation -323 (-4.7%) 1Q09 Change in Exchange Other non 1Q09 Domestic Mobile (*) Media Olivetti Other & 1Q10 Other non 1Q10 c
Slide 20: EBITDA Evolution
TELECOM ITALIA GROUP 1Q 2010 Results EBITDA Evolution Euro mln Agreement with Embratel in Brazil +21 Agreement with OLO and provisions +12 Other +4 Brazil +4 Media +1 Litigation (2) Other (8) 2,739 +5 +52 +37 2,833 (77) +72 +6 (1) +3 2,836 (10) 2,826 Brazil +53 Domestic (1) Organic Variation 42.0% 4
Slide 21: EBIT Evolution
TELECOM ITALIA GROUP 1Q 2010 Results EBIT Evolution Euro mln Agreement with Embratel in Brazil +21 Agreement with OLO and provisions +12 Other +4 Litigation (2) Brazil (9) Other (8) Media +1 +37 1,385 +55 +6 (1) +4 1,418 (10) 1,408 1,354 (8) +2 (31) Organic Variation 20.7% 20.3% 21.9% 21.7% Brazil +
Slide 22: Even and Back-Loaded Maturities
TELECOM ITALIA GROUP 1Q 2010 Results Even and Back-Loaded Maturities Euro mln Bonds Loans (of which long-term rent, financial and operating lease payable € 1,731) Drawn bank facility 15,260 39,094 (1) € 6.0 bln 1,500 Group Liquidity Position + € 7.75 bln 12,613 Undrawn Portion of Facilities = 2Q 2H
Slide 23: TI Group 1Q10 Results – P&L
TELECOM ITALIA GROUP 1Q 2010 Results TI Group 1Q10 Results – P&L Euro mln 2010 2009 Δ Abs. Δ% REVENUES 6.483 6.527 (44) (0,7) Other Operating Income 53 54 (1) (1,9) TOTAL REVENUES & OTHER INCOME 6.536 6.581 (45) (0,7) Total Purchases of materials and external services (2.498) (2.635) 137 (5,2) Perso
Slide 24: TI Group 1Q10 Organic & Reported Operating Results – Break up by BU
TELECOM ITALIA GROUP 1Q 2010 Results TI Group 1Q10 Organic & Reported Operating Results – Break up by BU Euro mln REPORTED RESULTS ORGANIC RESULTS 2010 2009 Δ Abs. Δ% 2010 2009 Δ Abs. Δ% REVENUES REVENUES Domestic 4.974 5.357 -383 (7,1) Domestic 4.974 5.354 -380 (7,1) Wireline Domestic 3.498 3.677 -