Telecom Italia Rsp

Investor Presentation • Feb 14, 2024

FY 2023 PRELIMINARY RESULTS

Disclaimer

This presentation contains statements that constitute forward looking statements regarding the intent, belief or current expectations of future growth in the different business lines and the global business, financial results and other aspects of the activities and situation relating to the TIM Group. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward-looking statements as a result of various factors. Consequently, TIM makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward-looking statements. Forward looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but forward-looking information by its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected results.

Analysts and investors are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this presentation.

The 2023 preliminary financial results of the TIM Group were drafted in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the EU (designated as "IFRS").

The accounting policies and consolidation principles adopted in the preparation of the 2023 preliminary financial results of the TIM Group are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2022, to which reference can be made, except for the amendments to the standards issued by IASB and adopted starting from 1 January, 2023.

Please note that the 2023 preliminary financial results of the TIM Group are unaudited.

Alternative Performance Measures

The TIM Group, in addition to the conventional financial performance measures established by IFRS, uses certain alternative performance measures for the purposes of enabling a better understanding of the performance of operations and the financial position of the TIM Group. In particular, such alternative performance measures include: EBITDA, EBIT, Organic change and impact of non-recurring items on revenue, EBITDA and EBIT; EBITDA margin and EBIT margin; net financial debt (carrying and adjusted amount), Equity Free Cash Flow, Operating Free Cash Flow (OFCF) and Operating Free Cash Flow (net of licences). Moreover, following the adoption of IFRS 16, the TIM Group uses the following additional alternative performance indicators: EBITDA After Lease ("EBITDA-AL"), Adjusted Net Financial Debt After Lease and Equity Free Cash Flow After Lease.

Such alternative performance measures are unaudited.

Financial and operating results #²

TIM Group

2 years of achievements driven by solid execution

Delivered 2 consecutive years of guidance for the 1st time since 2010-'11 TIM Group

Organic YoY performance (1)

LSD = Low-Single Digit; MSD = Mid-Single Digit; LMSD = Low-to-Mid Single Digit (1) Group figures @ average exchange-rate 5.44 R\$/€ in '22 and 5.40 R\$/€ in '23 (2) Upgraded in Aug. '22

Clear growth trajectory of Domestic trends TIM Domestic

Organic YoY performance (1)

TIM Entities delivered results (1/2) TIM Group

FY '23, organic YoY performance, TIM Consumer and TIM Enterprise revenues and service revenues consistent with July 2022 disclosure

TIM Entities delivered results (2/2) TIM Group

FY '23, organic YoY performance, NetCo revenues and service revenues consistent with July 2022 disclosure

TIM Domestic

Transformation plan execution on track, ~€ 0.8bn additional savings achieved in '23

	TARGET SAVINGS (€bn) (1) o/w OPEX savings (2) o/w cash cost / CAPEX extra-savings	2022 0.3 0.3 -	2023 1.1 0.7 0.4	2024 1.5 1.0 0.5	~€ 0.8bn additional savings in 2023 106% of incremental FY target achieved
		Highlights				2023 key contributors
Customer care	▪ Customer Care spend reduced 6% YoY thanks to lower human volumes (-18% YoY), increased productivity, make vs buy mix review, near-shoring and digital features upgrade				Decommissioning	▪ Energy savings from 3G switch-off and dismantling of obsolete network elements (e.g. exchanges equipment) ▪ Public Payphones, ~14k dismantled
IT	▪ Licensing cost optimized through contracts revision (>90 ▪ Real Estate & contracts terminated or renegotiated YTD) Energy ▪ IT spending governance strengthened through the set-up of a dedicated committee, ITC spend optimization and systematic					Optimized management of 200k sqm premises by leveraging home working & Friday closure by contractual agreement
HR & Corporate	review of >120 business plans ▪ Insourcing, completed 2nd ~1.1k employees across >100 different roles ▪ Travel expenses contained at same level of '22 despite COVID restriction (~27% below the 2023 initial budget) ▪ SMS fraudulent traffic prevention through new detection tools, SMS cap and reduction of off-net grey routes (-31pp YoY)		wave and involved during the year		Labour	▪ Hourly reduction, >70% of HCs involved, achieving >4k FTEs reduction ▪ Voluntary exits, ~0.6k HCs (~115% of FY target) ▪ Early retirements, >2.5k HCs (~109% of FY target) ▪ Skill Remix, ~0.5 HCs recruited (~113% of FY target)

(1) Cumulated savings vs. inertial plan (2) On 2021 restated cost baseline (€ 4.8bn)

Key financials TIM Group

Organic data (1), IFRS 16 and After Lease (AL), €m and YoY trend

	FY '23						vs. FY '22	Q4 '23	vs. Q3 '23
REVENUES	16,296	+3.1%	+3.4pp ↑	+1.9%	-1.8pp ↓	FY GROUP REVENUES BACK TO GROWTH improvement on Domestic, continued growth in
o/w Domestic	11,922	+0.6%	+6.1pp ↑	-0.1%	-2.3pp ↓	Brazil
SERVICE REVENUES	14,953	+2.3%	+1.0pp ↑	+3.0%	+1.4pp ↑	DOMESTIC SERVICE REVENUES BACK TO POSITIVE IN Q4
o/w Domestic	10,721	-0.7%	+3.1pp ↑	+1.2%	+1.7pp ↑	broadly stable in FY
EBITDA	6,383	+5.7%	+12.4pp ↑	+6.8%	+0.3pp ↑	GROUP EBITDA GROWTH IN FY
o/w Domestic	4,242	+1.7%	+16.0pp ↑	+5.5%	+1.9pp ↑	driven by Domestic back to positive 3 rd CONSECUTIVE QUARTER OF
EBITDA AL	5,304	+6.1%	+16.7pp ↑	9.4%	+0.8pp ↑	DOMESTIC EBITDA GROWTH

(1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation area. Group figures @ average exchange-rate 5.40 R\$/€

TIM Domestic

OPEX – Flat in FY thanks to Transformation Plan execution, higher revenue-driven costs offset by increased efficiencies. Q4 down YoY thanks to lower labour and G&A Organic data, IFRS 16, €m

	FY '23	YoY trend	Weight on OPEX trend	Q4 '23	YoY trend
DOMESTIC OPEX	7,680	+2 (+0.0%)		2,165	-57 (-2.6%)
(CASH VIEW)		-39 (-0.5%)			-59 (-2.5%)
INTERCONNECTION	1,007	-6.8%	-1.0pp ↓	256	-6.0%
EQUIPMENT	739	-12.3%	-1.3pp ↓	244	-13.4%
OTHER COGS	1,236	+23.2%	+3.0pp ↑	413	+17.3%
COMMERCIAL	1,294	+5.4%	+0.9pp ↑	359	+0.9%
INDUSTRIAL	1,180	+3.8%	+0.6pp ↑	319	+8.3%
G&A AND IT	414	-6.7%	-0.4pp ↓	110	-9.4%
LABOUR (1)	1,776	-5.8%	-1.4pp ↓	447	-13.5%
OTHER (2)	34	-42.0%	-0.3pp ↓	18	-35.4%

VARIABLE COSTS

up for higher CoGS related to ICT revenues dynamic despite lower interconnection and equipment

COMMERCIAL COSTS

up for higher Content & Vas (higher multimedia revenues) and Commissioning (down in cash terms)

INDUSTRIAL COSTS

up for higher energy, industrial spaces and provisioning despite lower network maintenance costs

G&A & IT

down for lower professional services, utilities and fleet management

LABOUR

benefitting from solidarity and FTEs reduction

TIM Group

CAPEX in line with plan. Net Debt lower QoQ thanks to positive EFCF organic performance and NRRP anticipation

Organic figures(1), IFRS 16 and After Lease, €m

(1) Group CAPEX net of exchange rate fluctuations (average exchange-rate 5.40 R\$/€)

Financial and operating results #²

Closing remarks TIM Group

DELIVERING & DELAYERING

DOMESTIC GROWTH TRAJECTORY CONFIRMED		3 consecutive quarters of positive EBITDA
TRANSFORMATION PLAN ON TRACK		>€ 0.8bn incremental savings vs inertial plan
2023 NRRP MILESTONES ACHIEVED		>€ 0.7bn NRRP anticipation cashed-in
FY EQUITY FCF AL TARGET ACHIEVED	EFCF AL broadly neutral in FY including NRRP anticipation
DELAYERING PLAN	Golden Power authorization received for NetCo transaction
ON TRACK	Separation activities execution in line with plan

TIM 2024-'26 PLAN TO BE PRESENTED AT THE CMD ON 7 MARCH

2 CONSECUTIVE YEARS OF RESULTS IN LINE OR ABOVE GUIDANCE

TIM Domestic

Fixed – 3 rd consecutive quarter of FSR growth YoY, higher ARPU, churn slightly higher in Q4 but contained in FY

Fixed Service Revenues Organic figures, YoY trend	Organic figures	Q4 '23	YoY trend	vs. Q3 '23	Highlights
3.0%	Fixed revenues	2,460	+3.1%	↓ -2.3pp
0.6%	Equipment	219	+5.1%	n.m. (1)	mainly higher consumer volumes sold YoY
0.2% -0.8%	Services	2,241	3.0%	+2.4pp ↑	activation fees drag -0.7pp YoY
-1.8%	o/w retail (2)	1,496	4.7%	+5.7pp ↑	lower CB, higher ARPU
	(3) o/w Nat. wholesale	499	1.8%	-0.6pp ↓	change in regulated prices more than offsetting lower customer volumes
Q4 '22 Q1 '23 Q2 Q3 Q4	o/w Int. wholesale	241	-5.9%	-9.3pp ↓	decrease in traditional low-margin voice revenues

(1) Wholesale deal with OF in Q3 '23 (2) Including ICT revenues generated by TIM Digital Companies (3) Including FiberCop revenues (4) Source: AGCOM

TIM Domestic

Mobile - MSR trend still affected by MTR reduction and lower CB YoY. MNPs under control, higher ARPU, churn contained

Liquidity margin - Debt maturities covered until '25 TIM Group

(1) Includes repurchase agreements (€ 0.8bn nominal amount) due in the following 6 months and does not consider € 0.1bn securities pledged against a bank guarantee (2) € 24.1bn is the nominal amount of outstanding M/L term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1.0bn) and current financial liabilities (€ 1.4bn), gross debt figure of € 26.4bn is reconciled with reported number (3) Cash-in on Jan. 2 nd , 2024 (4) After Lease view (5) Avg. M-L term maturity 5.2y (bonds 6.0y) (6) Gross debt adjusted (7) ~28% of outstanding bonds (nominal amount) denominated in USD and ~7% in BRL, fully hedged vs accounting currencies

Liquidity margin - IFRS 16 view TIM Group

Cost of debt ~5.4%*, +0.3pp QoQ and +1.0pp YoY

* Including cost of all leases

(1) Includes repurchase agreements (€ 0.8bn nominal amount) due in the following 6 months and does not consider € 0.1bn securities pledged against a bank guarantee (2) € 29.6bn is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1.0bn) and current financial liabilities (€ 1.4bn), gross debt figure of € 32.0bn is reconciled with reported number (3) Cash-in on Jan. 2 nd , 2024

TIM Group

Gross Debt - IFRS 16 view

Well diversified and hedged debt

€ m	NFP adjusted	Fair value	NFP accounting
GROSS DEBT
Bonds Banks & EIB	18,423 7,407	140 -	18,563 7,407
Derivatives Leases and long rent Other (1)	34 5,581 556	495 - -	529 5,581 556
TOTAL	32,001	635	32,636
FINANCIAL ASSETS
Liquidity position	4,794	-	4,794
Other	1,551	515	2,066
o/w derivatives o/w active leases o/w other Credit (2)	721 274 556	515 - -	1,236 274 556
TOTAL	6,345	515	6,860
NET FINANCIAL DEBT	25,656	120	25,776

~28% of outstanding bonds (nominal amount) denominated in USD and ~7% in BRL, fully hedged vs accounting currencies

(1) Includes debts due to other lenders related to: Factor (€ 222m), Aflac (€ 128m), Brazil 5G (€ 178m) and other (€ 28m) (2) Includes € 488m NRRP financial receivables (cash-in on Jan. 2nd, 2024) (3) Gross debt adjusted

ESG – Q4 findings TIM Group

2023- '25 Plan
-------------------	--	--	--	--	--	--	--	--	--	--	--

E		Group targets
Environment	▪ More green energy (540 GWh/h) through Purchase Power Agreements and photovoltaic plants ▪ Lower consumption thanks to the switch-off of obsolete fixed and mobile assets ▪ >16k modem regenerated, >19k smartphones returned with trade-in services	E Net Zero (Scope 1+2+3) E Carbon Neutrality (Scope 1+2) E Scope 3 Reduction (1)	2040 2030
S	▪ ature over-performance (+47% certificates)	E Renewable energy on total energy Women in leadership position (2) G	100% ≥29%
	▪ Acquisition of TS-Way for the prevention and analysis of cyber attacks ▪ "Italia 1 Giga": ~255k HHs connected with FTTH in 463	Scope 1: emissions from production (heating, cogeneration, company fleet) Scope 2: electricity purchase emissions Scope 3: emissions from upstream and downstream activities of the production chain (cat.1- purchase of goods; cat.2; capital goods; cat 11-use of goods sold)
Social	municipalities ▪ Gender pay gap: 53% of women managers received a	Domestic targets
	~10% average increase in earnings	E Green Products & Smartphones (3)	≥70%
	▪ Certification for Gender Equality achieved (UNI/pdr 125) ▪ Launch of the #Equality can't wait communication	E Circular Economy ratio (4)	2€/kg
	campaign and of "Women Plus" app to help women in	S Cloud, IoT & Security service revenues	+21% CAGR 23-25
	job search that also offers training and mentoring	Digital Identity Services (5) S	+30% CAGR 23-25
G	▪ New Code of Ethics with sustainability as a reference	S People trained on ESG skills	≥90%
Governance	point of TIM's long-term strategy ▪ ESG platform to track sustainability data related to	S Young Employees Engagement ≥ 78%
	targets, projects and non-financial reporting	S FTTH Coverage (% of technical units)	48%
Leader in corporate transparency and climate change performance	Platinum Medal as World's leading part of the top 1% telco Company of the best Companies for diversity and for ESG performance inclusion policies	Included in the "S&P's Sustainability Yearbook 2024", top 10% score	among the best Companies for

(1) Scope 3 cat.1, 2 and 11, 2019 baseline (2) Women managers, weighted average between Domestic and Brazil targets (≥27% and ≥35% respectively for '23-'25) (3) Baseline 2021 (4) Average revenues from the resale of used materials and assets plus waste recycling per kg of waste produced (5) PEC, SPID, ature (active services)

In the "Top 10 of the Diversity Brand Index" among the best Companies for commitment to D&I

-47% 2030

2025

2025

Further questions

please contact the IR team

(+39) 06 3688 2500

Investor\_relations@telecomitalia.it