TIM GROUP

Q2 '21 RESULTS Building growth & portfolio optimization

28 July 2021

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 financial results for Q2'21 and H1'21 of the TIM Group are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2020, to which reference can be made, except for the amendments to the standards issued by IASB and adopted starting from 1 January, 2021.

Please note that the limited review by the external auditors (E&Y) on the TIM Group Half-year Condensed Consolidated Financial Statements at 30 June 2021 has not yet been completed.

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) and Equity Free Cash Flow. Moreover, following the adoption of IFRS 16, the TIM Group uses the following additional alternative performance indicators:

* EBITDA adjusted After Lease ("EBITDA-AL"), calculated by adjusting the Organic EBITDA, net of non-recurring items, of the amounts related to the accounting treatment of lease contracts according to IFRS 16;

* Adjusted Net Financial Debt After Lease, calculated by excluding from the adjusted net financial debt the net liabilities related to the accounting treatment of lease contracts according to IFRS 16;

* Equity Free Cash Flow After Lease, calculated by excluding from the Equity Free Cash Flow the amounts related to lease payments.

Such alternative performance measures are unaudited.

OPERATIONS UPDATE

"Beyond connectivity" plan update

	What happened in Q2	KPIs
ESG	▪ improved further (1) CSI mobile ▪ Increased target for renewable energy and indirect emissions ▪ Leaner organization, with pre-retirements	CSI mobile +0.1% QoQ, after +0.5% in Q1 100% renewable by 2025 (from 51%) ~1k exits in H1; more planned in H2
Domestic	▪ Fixed lines stable, UBB net adds strong, churn lower QoQ Serie A + Champions League from July Best mobile coverage and fastest 5G network in Italy (2) ▪ Mobile churn lower QoQ (best in 14 years) ▪ ICT growth remains strong thanks to Group's factories	Retail UBB net adds +231k (0.5m H1) Churn 3.4% in fixed, 3.7% in mobile ICT revenues +28.5% YoY
Brazil	▪ Strong acceleration in revenues growth ▪ ARPU growth in all segments ▪ EBITDA growth higher QoQ	Service revenues +8.7% YoY, +5.4pp QoQ ARPU +10.3% YoY EBITDA (3) +6.4% YoY, +1.6pp QoQ
Group	▪ Revenues back to growth first time since Q3 2018 ▪ Extraordinary investments to set foundation for growth ▪ Net debt AL -€ 3.7bn YoY, on track for '23 2.6x leverage target	Revenues change YoY 0.2% 1.0% -10.1% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2021 2019 2020

4 key growth drivers described in Q1 are materializing

TIM Domestic 1 st growth driver - TIM becomes the "home of football" for a c. 5m market expected to move from satellite to fibre or from piracy to paying

TIMVISION "Football and Sports" launched in July, including in a single package the most complete content offering

DAZN with full Serie A TIM, full UEFA Europa League and the best of UEFA Conference League
Mediaset Infinity+ with UEFA Champions League (104 out of 137 matches per season)
Full Tokyo 2020 Olympics with Eurosport Player, including the channel Eurosport 4K in exclusive on TIMVISION (1)
Many other sports competitions on DAZN, Eurosport Player and TIMVISION (2)
TIMVISION, discovery+ and Mediaset Infinity+ entertainment catalogue: movies, TV series, shows, documentaries, cartoons and original productions
TIMVISION Box to easily access all this contents and more (i.e. Mediaset Free-to-air DTT channels and Prime Video App* with the remaining UEFA Champions League Matches)

* Prime subscription required (not included in TIMVISION "Football and Sports" package).

Serie A TIM and main		DAZN	Mediaset Infinity+	Amazon Prime Video	Mediaset	SKY	TIMVISION (6)
UEFA	Serie A TIM	Full				3 out of 10 matches per matchday	Full (DAZN)
competitions: offering matrix	UEFA Europa League	Full				Full	Full (DAZN)
	UEFA Champions League		104 out f 137 matches	16 out of 137 matches	17 out of 137 matches (including the final)	121 out of 137 matches (including the final)	104 out of 137 matches (Mediaset Infinity+) (6)
	Current price (€/month)	€29.99 (4) 28th) (€19.99 till July	€7.99	(included in the Prime subscription)	Free-to-air	€35,90 (5) Sep. 30th) (€30,90 till	€29.99 28th) (3) (€19.99 till July

(1) Eurosport Player included for 12 months with TIMVISION (2) Among others on DAZN, Eurosport Player and TIMVISION: Serie B, La Liga, English FA Cup, MotoGP, cycling events (3 Grand Tours, with exclusive Vuelta and the Classics), tennis (3 Grand Slam), basketball (Serie A), golf (with exclusive PGA Tour and European Tour), all winter sports, motors (24 Hours of Le Mans agreement renewed), UEFA Women's Champions League, Women's Football Serie A (3) 12 months promotional price for subscriptions until July 28th. Activation cost €9.99, TIM Vision Box included on loan for free use; Infinity+ included for 12months (4) 12 months promotional price for subscriptions until July 28th (5) Sky Smart offer via Internet with 18 months commitment required. Includes the mandatory Sky Tv entertainment pack and other sports contents (i.e. full Serie B, UEFA Conference League, Formula1). Activation cost € 9,00 (6) The remaining UEFA Champions League matches (on Amazon Prime Video App* and Mediaset Free-to-air channels) available on the TIMVISION Box

Q2 '21 RESULTS

2 nd growth driver Italy's fixed market back to growth

Fixed market growing... ...UBB accelerating (mainly FTTH/FTTC)

TIM leading the fight against digital divide

Market growth helping TIM's "Fix the fixed" to deliver results even in challenging environments. FSR growth expected for H2

growth

'21

Q2 Q3 Q4

Q2 Q3 Q4 Q1

'21

Q1 '20 Q2 Q3 Q4

3 rd growth driver "beyond connectivity" engine of growth, creating value and optionality

Telsy and Olivetti re-engineered as startups to ride IoT and cybersecurity growth prospects

	Merchant Services	IoT Smart Services	Cybersecurity	Crypto
	Electronic cash registers and POS, business management software and digital payments	Industrial IoT: IoT services and sensors for prioritized verticals Urban IOT: city control platforms	B2B managed security services offering including specialized consulting and high growth/ margin products	B2G innovative systems capable of securing and encrypting communications
Addressable market	~5 bn€ in 2024 4-5% CAGR	~4.5 bn€ in 2024 10% CAGR	~1.9 bn€ in 2024 7% CAGR	~€20m in 2024 20% CAGR
Margin	25-30%	10-15%	25-30%	~€40-50%
Market share ambition 2024	5%	5%	12%	60-80%

Noovle and Sparkle on track to reach their ambitious targets

Leading Italian cloud and infrastructure provider

Q2 performance confirms guidance with revenues +20% YoY
In 6 months Noovle has signed more than 1,100 contracts
Delivering data center spaces for Google regions in line with plan
Noovle is now a "Società Benefit" (for profit and sustainability)

Growth strategy: targeting new segments and geographies

Wholesale market: consolidate leadership

▪ New infrastructures in high growing geographies

▪ Development of major Hub

areas

Enterprise market: implementing a new model

New Enterprise Model. Started to increase international enterprise customers base thanks to new approach and portfolio
Sparkle becoming a core connectivity and E2E enterprise partner with new integrated portfolio of Security, IoT and Cloud services in collaboration with TIM Factories

Q2 '21 service revenues +13% YoY

Target 2023 double-digit EBITDA CAGR

4 th growth driver: EU approved Italy's Recovery and Resilience Plan and unlocked €24.9bn

by funding		by mission	€, bn
44.5 191.5 235.1 € bn	o/w € 186.8bn for investments (~26% digital) RRF	40.3 70.0 59.5 31.5 25.4 Education 33.8 30.9 Social 19.8 29.8 Health 15.6 20.2	1.6 '20	25.9 '22	41.6 37.8 '24 '25
	€0.2bn (phase 1)	Ongoing, >55% still available as of June 30th
	€0.9bn (phase 2)	Delayed after the summer		5.1%
Schools	€0.4bn	68% already assigned in public tender
"Italia a 1 Giga" plan	€1.1bn → €3.9bn	Consultation ongoing, tender in Q1 2022	-8.9%
"Italia 5G" plan	€2.0bn	Consultation ongoing, tender in Q1 2022	2020	2021
	€, bn Vouchers		Digitalization 49.8 Green Revolution Infrastructure React EU + Compl. Fund		RRF investments by year (€ 186.8bn investments, RFF) 35.6 € 15.1bn 13.5 '21 '23 New projection for Italy's GDP growth (1)

Italian Recovery and Resilience plan (€ 235.1bn)

Schedule of investments

New projection for Italy's GDP growth (1)

Guidance embodies TIM-DAZN agreement & market impact of voucher plan delay Expected benefits from Recovery Plan and Oi mobile acquisition not included yet

YoY growth rates, IFRS 16 / After Lease	Group		Domestic		(1) Brazil
	2021	2022-'23	2021	2022-'23	2021	2022-'23
Organic Service revenues	Stable to Low single digit growth	Low to mid single digit growth	Stable	Low to mid single digit growth	Mid single digit growth	Mid single digit growth High single digit growth (CAGR '20-'23) with Oi
Organic EBITDA AL	Low to mid single digit decrease	Mid single digit growth	Mid single digit decrease	Mid single digit growth	Mid single digit growth	Mid single digit growth Double digit growth (CAGR '20-'23) with Oi
CAPEX			~€ 3.0-3.1 bn according to football take-up	~€ 2.9 bn per year	~R\$ 13.5 bn	~R\$ 13.0 bn with Oi
Eq FCF AL	Net of ~€0.7bn Cumulated ~€ 4.0 bn tax realignment cost
Adjusted Net Debt AL	2.6x ~€ 16.8 bn Net Debt AL / EBITDA AL (3) Oi (2) excluding by 2023
Dividend	ordinary: floor of € 1 cent per share, aim to distribute 20-25% of yearly Equity FCF subject to deleverage execution savings: €2.75 cents per share throughout 2021-23

IFRS 16/After Lease – Group figures @ average exchange-rate actual 5,9 REAIS/€

(1) Guidance based on IFRS 16 for Brazil's EBITDA

(2) Excluding Oi's mobile acquisition

(3) Based on Organic EBITDA AL; 2.7x based on Reported EBITDA AL

Q2 '21 FINANCIAL & OPERATING RESULTS

TIM Group

Group revenues back to growth first time since Q3 '18; services 0.8pp better QoQ

Organic data (1), IFRS 16, € m

EBITDA after lease 1,185 1,433 Domestic Brazil Margin 37.6% -7.4% -9.5% +4.9% Q2 '21 D% YoY c. -2.5% YoY Like for like

Q2 total revenues +1.0pp QoQ (domestic -1%) Service revenues +0.8pp QoQ (domestic flat)

Domestic EBITDA AL like for like -2.5% YoY:

c. 5pp drags from labour cost discontinuities, e.g.: 1) 5 solidarity days vs. 12 in 2020, 2) mandatory holidays in 2020, 3) indirect cost of labour. These drags are not expected to be repeated in H2
2pp drags from football launch and factories' start up costs

Q2 cash generation and debt affected by one-off payments 3-year €4bn Equity FCF guidance reiterated

Equity free cash flow after lease

Q2 '21 EFCF AL € 161m net of:

231m substitute tax for goodwill realignment (leading to € 5.9bn tax asset, i.e. no tax payments for 18 years)
€ 148m payments of regulatory fines & one-offs (mainly Cassiopea) accrued and provided for in previous years, already embodied in 3 year guidance

YoY comparison is affected by :

Q2 2020 CAPEX lower than average due to COVID (€ 222m YoY swing)
Q2 2020 benefiting from the shift to H2 of Fistel payment (€ 81m YoY swing)
Benefit from TimFin kick off in 2020

Net Debt AL -€ 3.7bn YoY vs. -€ 1.7bn in Q2 '20

QoQ increase related to:

▪ spectrum pre-payment (€ 240m for 35Mhz usable for 5G), allowing to save € 40m financial charges

On top of:

▪ dividends payment (€ 312m including TIM Brazil minorities)

Net debt guidance FY '21: €16.8bn

TIM fixed lines remain stable for third consecutive quarter; churn falls further

Retail UBB net adds keep growing fast

UBB coverage and take up increase QoQ

0.5m retail ultrabroadband net adds in H1, highest level since H1 '18 (156k new BB lines(3))

UBB take up accelerating

Vouchers: >55% of first €200m tranche for low-income families still available. TIM getting c. 80% market share

Churn benefiting from convergence and increased direct payments (+7.3pp YoY)

(1) UBB take up calculated on technical HHs covered by UBB (2) Equivalent to >93% of families with a fixed line (3) New lines excluding customer base transformations

TIM Domestic

Fixed revenues stable helped by the business segment

Total Fixed Revenues +0.2% YoY in Q2 (after +3.0% in Q1)

Fixed Service Revenues -2.3% YoY (-0.5% in Q1)

International Wholesale +13.2% vs. +1.4% in Q1 thanks to improved voice and data services volumes
National Wholesale (1) -4.7% YoY impacted by comparison with very strong non-regulated revenues in Q2 '20
Retail (2) YoY trend -4.2% vs. -4.3% in Q1 benefiting from:
Customer base stabilization –2.9pp YoY, 0.8pp better QoQ
ICT revenues growing +28.5% YoY

Equipment +36.2% vs. +58.5% in Q1

Convergence grew with larger adoption of TIM Unica

Direct payments increased, with benefits on churn

Mobile churn keeps improving (new low of last 14 years) Calling human lines progressively stabilizing

Impact on MSR from CB reduction +1.4pp better QoQ (after ~ +1pp in Q1)

Churn 0.1pp better QoQ, +0.3pp YoY

CSI +0.1% QoQ in Q2, after +0.5% in Q1

Market MNP down YoY, TIM still the best among MNOs

MSR trend improving QoQ for better customer base trend and lower drags

Addressable cost base reduction decelerated to -3.1% YoY due to discontinuities on labor cost

Labour +2.1% YoY, would have been -11% YoY net of drags from:
lower solidarity days vs. Q2 '20 that benefited from anticipation of H2 solidarity: 12 days vs. 5 days in 2021 (8.5pp drag)
lower holidays vs Q2 '20 (4.3pp drag)

FTE 1.9k reduction YoY

G&A & IT +35% mainly for higher indirect personnel costs
Industrial: energy cost down -3% YoY thanks to lower consumption and better prices
Commercial: -17% mainly for lower commissioning and bad debt
CoGS increase related to ICT revenue growth
Equipment costs growth lower than sales growth
Interconnection increase for higher traffic volumes in international wholesale (data & voice bundles)

Two thirds of CAPEX dedicated to transformation and growth

Group Operating Working Capital

Group CAPEX up YoY due to:

Q2 '20 CAPEX affected by COVID
In Q2 '20 push on transformation CAPEX (2.5x YoY) for FTTH roll out (+15% FTTH premises in 6 months), football and Noovle's data centers
Reduction in maintenance CAPEX

Group Operating Working Capital outflow worsening -€ 161m YoY -€ 109m YoY worsening excluding YoY swing in non-recurring items

Domestic -€ 65m YoY mainly related to litigation settlements
Brazil -€ 49m mainly related to the Fistel payment shifted to H2 in '20

TIM Brasil accelerates growth rates thanks to successful value strategy

Revenues	accelerating growth trend, with positive contribution from both postpaid and prepaid on services	EBITDAgrowth thanks to revenues performance	Special Projects Fiber Co
Reported, R\$m 4,267 +8.7% 3,926 Services o/w Fixed +11.5% +8.5% o/w Mobile Q2 '21 Q2 '20	Tot. revenues +10.5% YoY, +7.5pp QoQ Services +8.7% YoY, +5.3pp QoQ MSR +8.5% YoY (vs. +2.8% in Q1) Postpaid +8.9% (vs. +3.9% in Q1) Prepaid back to growth, +5.4% YoY FSR +11.5% YoY driven by TIM Live	EBITDA net non-recurring items, R\$m 2,092 +6.4% +4.8% in Q1 1,967 Q2 '21 Q2 '20 20th quarter of positive EBITDA growth	CADE approval on June 16th Next steps ▪ Anatel's prior consent ▪ Closing expected for September October ▪ Higher secondary considering additional HPs vs deal's original
Mobile ARPU +10.3% YoY to 25.8 R\$/month Prepaid ARPU +11.2% YoY Postpaid ARPU +5.6% YoY (1)	TIM Live Revenues +21.1% YoY CB +10.0% YoY to 666k ARPU +8.2% YoY to 90.8 R\$	Infrastructure Development FTTH coverage +38% YoY 3.8m HHs covered Mobile access network 4G: 4.3k cities covered, +22% YoY	scope ▪ Smooth transition with a TSA contract ▪ Additional FTTSite contract to be signed at closing ~R\$ 11m in Q1 '21 New Customer Platform Partnership
Mobile ARPU growing for 22 consecutive quarters Consistent sequential revenues improvement	ESG R\$ 1.6bn sustainability-linked debenture issued 30 new active biosites to >1.7k +102 sky sites to 224 +15 renewable power plants	4.5G: 1.5k cities covered, +20% YoY Massive MIMO +285 sites QoQ Network Sharing Agreement coverage expansion in >350 cities each	TIM + Ampli (Cogna Group) Participating in the fast-growing >2m invoices paid distance learning segment Financial services TIM+C6: R\$20m revenues in Q2 '21

ESG guidance upgraded: renewable energy target now at 100% by 2025 and indirect emissions to fall -100%

Targets (1)

Eco-efficiency	+50%
Renewable energy (2) on total energy (%)	100% NEW	2025
Indirect emissions (3)	-100% NEW
(4) Carbon Neutrality		2030
Employees engagement	+19pp
Hours of training for reskilling and upskilling	6.4m hrs
Churn of young employees	<15%	2023
New VC fund size	€ 60m
IoT and Security service revenues (CAGR)	+20%
Green Smartphone	>15%	2024

(1) "Beyond Connectivity" plan targets were upgraded vs. previous plan, baseline 2019. Domestic, except for indirect emissions and carbon neutrality (Group) (2) Electricity (3) Scope 2, TIM Group (4) TIM Group

STRATEGIC INITIATIVES UPDATE

Strategic initiatives update: moving forward in portfolio optimisation

Additional portfolio optimization on the way to capture synergies and crystalize market's sector multiples

TIM Group ownership

EV/EBITDA multiple

CLOSING REMARKS

Closing remarks

Stabilizing connectivity revenues in Italy and accelerating in Brazil

Group revenues growing YoY for the first time since Q3 2018
Domestic fixed lines stable for third quarter in a row, UBB growing fast
Convergence bringing mobile churn at lowest level in 14 years

Investing in "beyond connectivity" to achieve growth and further portfolio optimization

Football, cloud, cybersecurity, IoT are growth engines and provide optionality
TIM is the sum of the core and all of these initiatives

Macro forecasts improved

Expected benefits from the Recovery Plan and the acquisition with Vivo and Claro of Oi mobile assets not yet embodied in guidance

TIM Group Realignment of intangible asset tax value

Realignment of the tax value	▪ Decree-Law 104/2020 allows for realignment of intangible asset tax value to the book value ▪ 3% substitute tax to be paid on the amount redeemed ▪ Future income taxes will benefit from intangible asset tax amortization
TIM SpA intangible assets redeemed	▪ Overall tax benefit: € 5.9bn (28.5% of tax basis) net of substitute tax ▪ Benefit will occur over 18 years
Substitute tax (3%): € 0.7bn	▪ To be paid in 3 annual instalments (€ 0.2bn per year), from June 2021

Liquidity margin - After Lease view Cost of debt ~3.2%, -0.1p.p. QoQ, -0.2p.p. YoY

(1) € 23,915m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 400m) and current financial liabilities (€ 314m), the gross debt figure of € 24,629m is reached

³² Q2 '21 RESULTS

Cost of debt ~3.6%*, flat QoQ, -0.2p.p. YoY Liquidity margin - IFRS 16 view

* Including cost of all leases

(1) € 28,654m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 427m) and current financial liabilities (€ 314m), the gross debt figure of € 29,395m is reached

Well diversified and hedged debt

	NFP adjusted	Fair value	NFP accounting
GROSS DEBT
Bonds	20,258	248	20,506
Banks & EIB	3,847	-	3,847
Derivatives	221	1,417	1,638
Op. leases and long rent	4,766	-	4,766
Other	303	-	303
TOTAL	29,395	1,665	31,060
FINANCIAL ASSETS
Liquidity position	6,280	-	6,280
Other (1)	1,043	1,410	2,453
TOTAL	7,323	1,410	8,733
NET FINANCIAL DEBT	22,072	255	22,327

Average m/l term maturity: 6.9 years (bond 6.6 years only)

Fixed rate portion on medium-long term debt ~71%

Around 25% of outstanding bonds (nominal amount) denominated in USD and GBP and fully hedged

Deleverage: € 1.3bn debt cut in H1 (-€ 1.2bn After Lease view)

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

(2) Including financial investments, licence, cash taxes & other

(3) Includes Inwit deconsolidation

Net Income

Reported data, € m, Rounded numbers

(2) Non-recurring items include personnel provisions (2021-26 layoffs ex art.4 Fornero Law), legal and COVID related costs

FiberCop Financials in a nutshell(1)

EBITDA to evolve to FTTH in time…

FiberCop value to grow over time thanks to switch in the mix from copper towards fiber

For further questions please contact the IR team

(+39) 06 3688 1 // (+39) 02 8595 1

Investor\[email protected]

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