Telecom Italia Rsp

Investor Presentation • May 10, 2023

Q1 '23 RESULTS

11 MAY 2023

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.

The financial results of the TIM Group are prepared 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 Q1 '23 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.

The financial results for Q1 '23 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.

Operations update #¹

Financial and operating results #²

Q1 '23 Highlights TIM Group

FY 2023 guidance confirmed

Improving trends on main financials TIM Group

1

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

(1) Net of non-recurring items, change in consolidation area and exchange rate fluctuations. Group figures @ average exchange-rate 5.57 R\$/€ (2) Law Decree 207/2021 (3) After Lease (4) CAPEX net of licences

TIM Entities delivering results (1/2)

	Revenues	Services	Achievements	Main KPIs
TIM Consumer (CO+SMB)	-5.1% YoY	-5.6% YoY	▪ Repositioning towards premium segment ongoing ▪ TIM 1st brand in Top of mind and awareness ▪ Strong recovery on YoY net balance despite price-ups: higher gross adds on fixed, lower deactivations on mobile FTTH leadership: TIM 1st in market share(1), ~1m lines reached in ▪	Fixed net adds Mobile net adds k lines k lines, human +34 +117 +23 ∆YoY +20 ∆YoY MNP -72 -64 -136 -148 Q4 '22 Q1 '23 Q4 '22 Q1 '23
			Q1 ▪ Refocusing ICT portfolio on SMB while increasing sales performance (value of IT contracts signed +17% YoY) ▪ Content distribution deal with Disney+ renegotiated	FTTH market share (1) +3.9pp -1.5pp -3.9pp -2.8pp +4.3pp ∆YoY 24% 21% 20% 20% 15% TIM Op.2 Op.3 Op.4 Others
	+4.4% YoY	+3.9% YoY		Service Revenues Q1 '23
TIM Enterprise			▪ Revenue growth with focus on margin generation supported by strong pipeline, change in revenue mix ongoing with push on high margin services ▪ Good performance on operating cash generation also thanks to CAPEX peak already reached on Data Centers transformation ▪ Acquisition of cyber-security player TS-Way a further step in the consolidation of TIM Enterprise's leadership as Italy's biggest	Δ Revenue mix YoY weight Δ YoY Connectivity -5% 42% -3.8pp Cloud +16% 30% +3.3pp IoT -4% 2% -0.1pp Security +17% 3% +0.4pp Other IT +5% 22% +0.3pp
			ICT platform	Value of contracts signed (2) Services +6% YoY

TIM Entities delivering results (2/2)

	Revenues	Services	Achievements	Main KPIs
NetCo	+3.4% YoY	-0.9% YoY	▪ Positive revenues trend for improved technology mix (from copper to fiber) ▪ FTTH roll-out in line with plan (targeting 48% coverage by '25) ▪ Technology remix ongoing with growing portion of fiber (70% of tot. accesses, +5.0pp YoY, +1.0pp QoQ) ▪ (1)(+14% YoY) Continued growth of high value connectivity CB	>79% market share ~95% FTTx coverage on active lines ~60% >100Mbps ~15.7m fixed accesses, o/w >72% FTTx
				33% 26% FTTH coverage 6.3 7.8 million technical units Q1'22 Q1'23
TIM Brasil	+19.3% YoY	+19.3% YoY	▪ Over-delivering on growth targets thanks to higher-than-expected synergies ▪ Oi integration completed, higher profitability from healthier mobile competition and improved value proposition and customer experience(2) ▪ Higher CAPEX efficiency from 5G: full mobile coverage in key markets, ahead of competition with ~4.6k antennas (~1.7x higher vs peers)(3) ▪ Smart approach on commercial expansion of fixed broadband focused on higher speeds, ARPU and customer experience improvement (77% of plans with connection speeds ≥150 Mbps) ▪ Partnership signed with Way Brasil: 4G for >600 km of highways

Pricing context- Positive evolution both on wholesale and retail TIM Domestic

Wholesale: tariffs revision ▪ Regulated access prices for '23 approved by Agcom and greenlighted by EU Commission ▪ New prices to be applied retroactively from Jan. 1st '23, considering that '22 prices remained unchanged vs '21 ▪ Gap vs other EU markets on copper access prices reduced, but not completely closed 8.9 9.7 10.7 8.8 IT FR DE UK ULL SLU 5.3 9.7 6.9 7.8 10.0 2023 tariffs change 6.0 2022-'23 tariffs (€/line/month) '22 tariffs '23 tariffs ∆ YoY ULL 8.9 10.0 +13% SLU 5.3 6.0 +13% VULA FTTC 12.5 13.2 +6% Full inflation-link in '23 (>10%) VULA FTTH 14.7 14.4 -2% Growing in '23 No cost-orientation in End of Service areas 10.0 10.0 2022 tariffs ▪ 2023 selective price ups launched so far on 4.3m fixed lines and 2.1m mobile lines, ~€ 35m upside on '23 ▪ Repricing campaign to be further extended with a "more for more" approach Retail: Selective repricing Retail: CPI-linked price adjustments ▪ Agcom guidelines for annual CPI-linked price adjustments from '24: – CPI-linked price adjustments not qualified as a change of contract conditions (no right for customers to withdraw without penalty) – on existing contracts, through explicit acceptance of end-user (otherwise, contract is maintained until its expiry of max. 2 years) – on new contracts, through specific clause and with no mark-up and no floor ▪ Public consultation launched on Apr 11th '23, final approval expected in H2

3

National Recovery & Resilience Plan update TIM Domestic

• NRRP simplification measures approved by the Government in Apr. '23
• 20% cash-in grant advance payment obtained on NRRP UBB deployment initiatives ("Italia 1Giga", "5G backhauling" and "5G coverage")

€ 0.5bn upfront cash-in grant available from '23

Transformation plan – € 0.2bn savings achieved in Q1 TIM Domestic

	2022	2023	2024
TARGET SAVINGS (€bn) (1)	0.3	1.1	1.5
o/w OPEX savings (2)	0.3	0.7	1.0
o/w cash cost / CAPEX extra-savings	-	0.4	0.5

€ 0.2bn savings in Q1 '23 € 0.1bn OPEX savings € 0.1bn cash cost /CAPEX extra savings 26% of incremental FY target reached

Committing on big / key initiatives addressing >50% of tot. cash cost baseline

Simplify cost structure	▪ Fixed Network: tender on-going on Delivery, Assurance and Creation activities; Decommissioning plan underway ▪ Energy: efficiencies in real estate, asset modernization in >7k sites and central offices
Rightsize & talents' uplift	▪ Labour: hourly reduction, early retirements & voluntary exits ▪ Insourcing: ~1.2k headcounts to be reskilled to reduce external costs ▪ Hirings: ~0.4k headcounts to be recruited in '23
Enhanced cost optimization	▪ Customer care: lower human volumes, increased productivity, make vs buy mix review & near-shoring ▪ Sales channel mix: efficiency increase ▪ Mobile Network: RAN cost optimization ▪ Logistic: optimization through analytics, AI and E2E process improvement
Digital break through	▪ Customer experience: app optimization, caring features upgrade ▪ Fraud hub: set-up of a "Fraud services" center of excellence ▪ Smart authentication: eSIM request and activation process improvement

Q1 '23 achievements

Labor

• ✓ Hourly reduction: >70% employees involved, average impact reduction equivalent to 4.2k FTEs
• ✓ Voluntary exit: ~40% of target achieved (~0.2k headcounts)
• ✓ Insourcing: ~0.3k headcounts already re-skilled

Other Savings

• ✓ Energy: new savings initiatives launched for up to 160 GWh in '23
• ✓ Car fleet: ~85% of reduction target achieved (~1.5k)
• ✓ Dematerialization: +10% e-bills, >700t CO² lower impact in '23
• ✓ 3G decommissioning: savings for ~€ 30m from lower energy consumption

Delayering Plan update TIM Group

Key financials TIM Group

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

	Q1 '23	∆ YoY	YoY trend vs Q4 '22
Revenues	3,847	+4.3%	↑ +1.0pp
Service Revenues	3,524	+2.8%	↓ -0.8pp
o/w Domestic	2,551	-2.4%	↓ -0.9pp
EBITDA	1,459	+3.8%	↑ +1.1pp
o/w Domestic	1,000	-2.8%	↑ +1.4pp
EBITDA After Lease	1,189	+0.5%	↑ +1.8pp
CAPEX (2)	837	-11.3%
o/w Domestic	606	-14.2%
EFCF After Lease	-397	-520
Net Debt After Lease (3)		20,455 (+440 in Q1)

• 3 rd quarter of continued Revenues YoY growth, with improved trend vs Q4 '22
• 4 th quarter of continued Service Revenues YoY growth, at a lower pace vs Q4 '22 due to activation fees discontinuity
• 2 nd quarter of continued EBITDA growth YoY, with improved trend both on Domestic and Brazil
• EBITDA AL turned positive YoY
• CAPEX behind schedule in Q1, FY plan confirmed
• EFCF AL negative in Q1 mainly for working capital and FX
• Net Debt AL increasing 0.4bn QoQ

TIM Domestic

Fixed – Service revenues affected by lower activation fees on retail; KPIs improved with higher ARPU, churn stable and better net adds YoY

Fixed Service Revenues Organic data, YoY trend					Organic data €m
						Q1 '23	YoY trend
			-0.8%	-1.8%	Fixed revenues	2,169	+1.6%
					Equipment	183	+64.5%	80% of YoY growth from wholesale deal with OF
	-5.0%	-3.9%			Services	1,986	-1.8%	2.2pp drag from lower activation fees
-5.8%					o/w retail (1)	1,253	-3.1%	lower CB, higher ARPU
Q1 '22 Q2	Q3	Q4	Q1 '23	(2) o/w Nat. wholesale	498	+0.9%	+ve contribution from change in regulated price
					o/w Int. wholesale	226	-2.6%	lower voice revenues with low marginality

(1) Including ICT revenues generated by TIM Digital Companies (2) Including FiberCop revenues (3) Source: AGCOM

TIM Domestic

Mobile – Service revenues mainly affected by sharp MTR reduction and lower CB, churn contained despite price ups, ARPU Consumer stable YoY net of MTR drag

Q1 '23 RESULTS 11 May 2023 15 TIM Domestic

OPEX - Slight increase entirely attributable to success-driven costs, all other cost buckets down YoY

Domestic OPEX Organic data, IFRS 16, € m
	Q1 '23	YoY trend	Contribution on tot. OPEX
TOT. OPEX	1,843	+23 (+1.3%)
(cash view)		+13 (+0.7%)
Interconnection	225	-13%	-1.9pp
Equipment	187	-2%	-0.2pp
CoGS	256	+25%	+2.9pp
Commercial	316	+11%	+1.8pp
Industrial	254	-1%	-0.1pp
G&A and IT	105	-7%	-0.5pp
(1) Labour	485	-2%	-0.7pp
(2) Other	15	-7%	-0.1pp

• Variable costs +2% YoY in Q1, with higher CoGS related to ICT revenue growth (+11% YoY) not offsetting lower interconnection (rationalization of low-margin international voice revenues) and equipment sold
• Commercial costs +11% YoY driven by higher Content & Vas (related to higher multimedia revenues), Commissioning and Advertising offset by lower bad debt (-9% YoY) and customer management
• Industrial costs -1% YoY mainly for lower network and energy costs (-3m YoY vs +7m in Q4 '22) offsetting higher industrial spaces
• G&A and IT -7% YoY for IT costs and professional services
• Labour -2% YoY driven by solidarity and lower FTEs

TIM Brasil - Double-digit growth thanks to Oi consolidation TIM Brasil

Reported figures, R\$ bn and YoY change

	Q1 '23	∆ YoY	YoY trend vs Q4 '22
Service revenues	5,467	+19.3%	-1.5pp ↓
o/w Mobile	5,152	+20.2%	-1.4pp ↓
o/w Fixed	315	+6.0%	-3.1pp ↓
EBITDA net of NRI (1)	2,572	+21.8%	+4.9pp ↑
CAPEX	1,289	-2.9%
EBITDA-CAPEX on revenues	22.8%	+6.1pp

• Strong service revenues performance driven by M&A, volume-tovalue and continuous migration to fiber
• EBITDA benefiting from digitization and ongoing cost efficiencies
• Higher EBITDA-CAPEX margin also for smart CAPEX allocation

52.3 68.7 68.8 62.5 61.8 Q1 '22 Q2 Q3 Q4 Q1 '23 Mobile CB (2) million lines Mobile KPIs: last quarter of impact from Oi acquisition 27.4 25.8 25.0 26.6 27.7 Q1 '22 Q2 Q3 Q4 Q1 '23 Mobile ARPU R\$/month +7.6% ∆YoY Oi closing Base cleaning +0.1% -5.8% -4.1% +0.9%

Fixed KPIs: continued growth from migration to FTTH

CAPEX reducing YoY, Net Debt increase due to negative EqFCF TIM Group

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

Group Domestic Brazil

Liquidity margin - Strengthened by new refinancing initiatives TIM Group

After Lease view

	New refinancing initiatives after 2 years absence from the debt capital market	€ 0.85bn 5y unsecured fixed-rate bond issue (Jan. '23) ✓ largest single B fixed rate high yield deal priced since Oct. '21 ✓ 1 st rated EU benchmark high yield deal of '23			€ 0.4bn tap issue successfully completed (Apr. '23) ✓ improvement on original issue terms (6.69% yield vs 6.875%) ✓ largest single B bond tap issuance in EU since Oct. '21			€ 0.36bn EIB financing approved (May '23) for 5G network development
	Coverage of debt maturities until '24	~67% M/L term debt at fixed rate			Avg. M-L term maturity 5.5y (bonds 6.3y)			Cost of debt ~4.3% (1) +0.4pp QoQ and +0.9pp YoY
Liquidity margin			Debt maturities				Gross debt
€ bn (2) 8.2 0.4 3.7 4.0	Coverage 2.3 1.4 0.8	3.4 4.1 2.0 1.4 3.4 0.7	4.0 1.8 2.2	2.0 1.3 0.7	6.2 6.4 1.5 1.1 (0.1) 0.4	(3) 23.5 17.3 6.2	Derivatives 0.8% Banks & EIB 29.1% Other 1.9%	Bonds 68.2%
Liquidity Margin Repurchase agreements	Within '23	FY '24 FY '25 Undrawn portions of committed bank lines	FY '26	FY '27 Cash & cash equivalent	FY '28 Beyond '28 Bonds	Total M/L term Loans	~32% of outstanding bonds (nominal amount) denominated in USD and GBP and fully hedged

Q1 '23 RESULTS (1) After Lease view (2) Includes € 444m repurchase agreements (nominal amount) of which: € 344m will expire in April '23 and € 100m will expire in March '24 (3) € 23,526m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1,189m) and current financial liabilities (€ 1,044m), gross debt figure of € 25,759m is reconciled with reported number

Financial and operating results #²

FY '23 guidance confirmed - Positive drivers throughout the year TIM Group

Q1 '23 in line with expectations

EFCF AL trajectory expected to improve throughout the year

(1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation area

Guidance 2023-'25 TIM Group

Organic figures, IFRS 16 / After Lease, growth rates and €bn figures (1)

Over-delivery in 2022, positive acceleration also in '23-'25 despite worsening macro scenario

LSD = Low-Single Digit MSD = Mid-Single Digit LMSD =Low-Mid Single Digit

(1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation area. Group figures @ average exchange-rate 5.44 R\$/€

ESG - Q1 findings TIM Group

		2023- '25 Plan
E Environment	▪ Agreement with Enel X signed for the installation of a	Group targets
	photovoltaic system that will be able to generate >1,63 GWh/year with a saving of ~740k kg of CO per year 2	E Net Zero (Scope 1+2+3)	2040
		E Carbon Neutrality (Scope 1+2)	2030
S ▪ ▪ Social ▪ ▪	New smart working agreement into force,	E Scope 3 Reduction (1)	-47%	2030
	transitioning from 2 to 3 smart working days and	E Renewable energy on total energy	100%
	providing for closure of offices on Friday with total energy saving of 35GWh on avg. per year	Women in leadership position (2) G	≥29%	2025
	Individual Training Plans consolidated, flexibility to define own individual training path TIM included in the top 20 of Diversity Brand Index	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) Domestic targets
	2023, awarding Company's ability to develop a culture oriented towards D&I
	"Digital" award received for "TIMVISION Ascolta" project which allows blind/visually impaired children to access cartoons thanks to audio descriptions	E Green Products & Smartphones (3)	≥70%
		E Circular Economy ratio (4)	2€/kg
G ▪ ▪ Governance	2022 Sustainability Report further enriched	S Cloud, IoT & Security service revenues (5)	+21% CAGR 23-25
	New Code of Ethics approved, sustainability as a	Digital Identity Services (6) S	+30% CAGR 23-25	2025
	reference point of Company's L-T strategy	S People trained on ESG skills	≥90% ≥ 78%
	▪ TIM included in S&P's Sustainability Yearbook 2023	S Young Employees Engagement
	with Top 10% S&P Global ESG Score	S FTTH Coverage (% of technical units)	48%

P&L - From EBITDA to Net Income TIM Group

Reported data, €m

(1) Non-Recurring Items include provisions for personnel (2021-26 layoffs ex art.4 "Fornero" law), claims and litigation

Liquidity margin - IFRS 16 view TIM Group

Cost of debt ~4.8%*, +0.4pp QoQ and +1.0pp YoY

* Including cost of all leases

(1) Includes € 444m repurchase agreements (nominal amount) of which: € 344m will expire in April '23 and € 100m will expire in March '24 (2) € 28,970m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 1,273m) and current financial liabilities (€ 1,044m), gross debt figure of € 31,287m is reconciled with reported number

Q1 '23 RESULTS 11 May 2023 27

Gross Debt - IFRS 16 view TIM Group

Well diversified and hedged debt

€ m	NFP adjusted	Fair value	NFP accounting	Gross Debt
GROSS DEBT
Bonds	17,563	168	17,731	Banks & EIB
Banks & EIB	7,492	-	7,492	23.9%
Derivatives	209	413	622
Leases and long rent	5,528	-	5,528	Op. leases and long rent
Other (1)	495	-	495	17.7% Bonds
TOTAL	31,287	581	31,868	56.1% Derivatives
FINANCIAL ASSETS				Other 0.7% 1.6%
Liquidity position	4,151	-	4,151
Other	1,316	684	2,000	Average m/l term maturity:
o/w derivatives	1,072	684	1,756	6.6 years (bonds 6.3 years)
o/w active leases	163	-	163
o/w other credit	81	-	81	Fixed rate portion on M/L term debt ~73%
TOTAL	5,467	684	6,151	~32% of outstanding bonds (nominal amount) denominated in USD and GBP and fully hedged
NET FINANCIAL DEBT	25,820	(103)	25,717

Net debt - Adjusted TIM Group

€ m; (-) = Cash generated, (+) = Cash absorbed, excluding call-outs

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