Telecom Italia Rsp

Investor Presentation • May 4, 2022

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 Q1 '22 of the TIM Group are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2021, to which reference can be made, except for the amendments to the standards issued by IASB and adopted starting from January 1 st , 2022.

The financial results for Q1 '22 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) and Equity Free Cash Flow. 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

FINANCIAL AND OPERATING RESULTS

CLOSING REMARKS

Highlights

Executive team & new organization completed	▪ Sound mix between internal and external managers ▪ Internal resources valued in key positions plus selected sector external managers to quickly optimize Consumer and Enterprise segments	Network: FTTH roll-out	▪ FTTH roll-out on track, with strong wholesale KPIs ▪ UBB coverage reached ~94% of families with an to 47% (4) active fixed line, take up +4.0pp YoY
Business units action plan ongoing	▪ Consumer: repositioning process in place, new offer and communication campaign to be launched in Q2 ▪ Enterprise: well-positioned, focus on operational processes optimization	Oi closing on 20 April, 2022	▪ R\$ 16-19bn value (NPV) for TIM Brasil ▪ Market dynamics reshaped, with positive effects on innovation and quality ▪ Reducing CAPEX need while boosting cash flow ▪ Higher shareholders remuneration
NRRP/NSH (1) initiatives	▪ TIM's proposal submitted for main ongoing tenders (2) ▪ The majority of required investments to be absorbed in the 2022-'24 CAPEX guidance	Signed agreement with Ardian on INW stake	▪ Agreement for the sale of an additional 41% stake in Daphne 3 ▪ TIM will receive ~€1.3bn, in addition to the repayment of the loan of ~€0.2bn
Cost transformation	▪ Main initiatives to over-achieve 2024 target savings identified ▪ Already targeting 20% of addressable baseline (3) ▪ Roadmap definition and quick win start by May	Positive EFCF generation	▪ Positive Q1 '22 EFCF AL at € 123m, thanks to positive operational performance and with payments for DAZN partially compensated by positive FX

(1) NRRP = National Recovery and Resilience Plan; NSH= National Strategic Hub (2) Proposal submitted for "Italia 1 Giga", "Connected Schools" (phase 2) and "Connected Health Care" call for tenders (3) Targeting 20% (up from 15%) of 4.8 B€ addressable OPEX baseline as reported in "FY '21 Results and 2022-'24 Plan" presentation of March 3rd (4) UBB take up calculated on technical HHs covered by UBB

Consumer: new positioning with "human touch-based" strategy

TIM's Network managed by TIM's PEOPLE
Satisfying every connectivity need Best through the best UBB technology, technology everywhere	Care-free customer experience Superior thanks to end-to-end support customer care delivered by TIM experts
Offer Ecosystem Channel Evolution
✓ Customer Centric Approach. Service portfolio driving new acquisitions, convergence on CB and direct payments ✓ Tiered segmented premium positioning focused on specific market segments	✓ Customer base management in a multi-channel approach ✓ Same visual in all touchpoints, new identity on digital properties ✓ Customer experience improved through new store format ✓ Footprint evolution (quantity and location) and performance management optimization
	Footprint New Store Experience Performance optimization Format Improvement Management
Convergence Direct payments (2) +7.2pp YoY 4P convergence (1) +5.8pp YoY on fixed +73% YoY TIM UNICA CB +4.3pp YoY on mobile

Enterprise: consolidating leadership in a sizable, fast-growing and profitable ICT space, catering to Top Enterprises and PA

TIM already market leader, with most complete offerings…
	(1) Revenues	Connectivity	DC in Italy	Private Cloud	Public Cloud	Managed/ Prof. Serv.	AI & Analytics
Op. 1
Op. 2
Op. 3
Op. 4

…in a sizable, fast-growing and profitable ICT market (2)

	Cloud	Security	IoT
Market size(3)	€ 5.5bn	€ 2.1bn	€ 7.9bn
CAGR 2021-'25	+15%	+8%	+9%
Marginality(4)	30%-50%	25%-45%	20%-50%

Continuous priority focus on Top Enterprises and PA, benefiting from longer duration/significant contract value

• (1) Enterprise segment revenues, 2021 data on TIM, 2020 data on Italian market (source: analysis of market expert interviews and public financial reports of selected market players) (2) Italian ICT market size € 21.7bn including Connectivity, Cloud, Security and IoT
• (3) Cloud incl. IaaS, SaaS, PaaS, Colocation, Migration, MS for Cloud; Security incl. products, consulting services, MS, implementation & HW support; IoT incl. applications, HW and installation (4) Direct margin, defined as revenues minus direct costs (incl. distributable OPEX)

(5) NRRP = National Recovery and Resilience Plan; NSH= National Strategic Hub

TIM Group well positioned to capture NRRP/NSH(1) opportunities

Public funding initiatives update

• National Strategic Hub: tender ongoing, TIM consortium project selected as the most suitable and with right to match (1)
• TIM's proposal submitted in response to major ongoing tenders: "Italia 1 Giga", "Connected Schools" (phase 2) and "Connected Healthcare"
• Phase 2 voucher for small and medium businesses launched

Open RAN & Cloud Edge Connected Schools Phase 2 Italia 1 Giga NSH & PA cloud migration Connected Healthcare 0.3 0.2 3.7 1.9 0.4 1.5 Resources allocated (5) phase Italia 5G 2.0 (4) €bn

…with most of these investments to be absorbed in the 2022-'24 CAPEX guidance

(1) NRRP = National Recovery and Resilience Plan; NSH= National Strategic Hub (2) NRRP and Italian Ultra-Broadband Strategic Plan, funded by national and EU funds (3) Tender for the set-up of cloud infrastructure launched on January 26th (€ 0.7bn, RRF allocation € 0.9bn) (4) "Italia 5G" Plan's related tenders launched on March 15th: "5G coverage" (€0.98bn) and "5G backhauling" (€0.95bn). Deadline for presentation of offers on May 9th (5) Tenders value may differ from original NRRP allocation

Being bold on the Transformation Plan, already targeting 20% of addressable baseline

OPERATIONS UPDATE

FINANCIAL AND OPERATING RESULTS

CLOSING REMARKS

Q1 '22 key financials – Group

Organic data (1), IFRS 16, € m

Group results in line with FY '22 guidance

(1) Excluding exchange rate fluctuations, non-recurring items and change in consolidation area. Group figures @ average exchange-rate actual 5.87 R\$/€ (2) Adjusted Net Debt After Lease

Group results at a glance, in line with FY '22 guidance

Organic data (1), IFRS 16, € m

(1) Organic data net of non-recurring items and change in consolidation area; comparable base (Q1 '21) also excluding exchange rate fluctuations. Group figures @ average exchange-rate actual 5.87 R\$/€ (2) Adjusted Net Debt After Lease

Fixed service revenues affected by tough comparison vs. 2021, better churn despite premium positioning and newcomer

Mobile: pursuing value vs. volume strategy

OPEX broadly flat YoY reflecting shift in revenue mix, higher ICT and multimedia contribution

• Variable costs -5%, with lower equipment partially compensated by higher CoGS (related to ICT revenue growth). Interconnection down YoY driven by incoming glide path partially counterbalanced by higher international voice revenues
• Commercial costs flat YoY, with higher football and cloud set up costs offset by lower advertising, bad debt and customer management
• Industrial costs +5% mainly for higher industrial spaces and energy
• G&A higher YoY for covid rebound (Q1 '21 lockdown), consultancies and professional services also related to NRRP/NSH initiatives. IT increase related to ICT revenues growth
• Labour -5% YoY mainly for positive contribution from solidarity and FTE reduction

Higher growth CAPEX, positive EFCF generation

Domestic CAPEX up YoY with 2/3 of the increase related to higher growth investments for FTTH roll-out, mobile coverage, Cloud and Data Centers

"Run" CAPEX increase mainly attributable to network expansion and different phasing of running IT CAPEX, to be entirely offset in the next quarters

EFCF AL Group Equity Free Cash Flow After Lease €m Positive Q1 '22 EFCF AL at € 123m, thanks to positive operational performance and including DAZN payment and Q1 '22 EFCF AL reported DAZN payment & FX Q1 '22 EFCF AL adjusted

positive FX contribution

Net debt AL slight increase QoQ (+€ 0.1bn, including € 0.2bn 5G licence payment in Brazil)

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

TIM Brasil

Brazil: another strong quarter in operational and financial metrics

Reported data, R\$ m

OPERATIONS UPDATE

FINANCIAL AND OPERATING RESULTS

CLOSING REMARKS

Oi closing: the acquisition is a game changer for TIM Brasil

How much we are paying…

~R\$ 6.35bn amount disbursed (1)

~R\$ 474m network capacity contract (2)

~R\$ 251m transition service agreement (3)

• (1) Net of R\$ 634m retained from adjusted price (R\$ 6.98bn including changes foreseen in the SPA and a net cash position of R\$ 51m). Oi may be entitled to receive up to R\$ 230m from TIM, subject to the achievement of certain targets until March 31st, 2023
• (2) NPV of 10-year contract to provide transport network capacity
• (3) Temporary contract to supply subscriber base management and Network Operations Center (NOC) maintenance services

Closing remarks TIM Group

• Q1 results on track to reach FY guidance. FY guidance (including OI) reiterated
• CEO & management team working to outline the group's reorganization
• Enterprise segment to accelerate its growth in the coming years, and to gain standalone relevance within TIM Group. New Head of Enterprise in place
• Consumer in a transformation mode, repositioning process in place and actions identified
• On costs, transformational plan has started: on track to secure 2022 target (6% of addressable OPEX baseline). 2024 target raised from 15% to 20%
• Transformational deal with Oi completed: a new chapter ahead, already resulting in higher TIM Brasil shareholders remuneration
• Capital Market Day on July 7th, 2022

ESG: Q1 actions already supporting Plan's targets

	▪ Waiting for validation of scope 1, 2 and 3 emission targets
Transforming processes to be green	from SBTi by June '22 (1) ▪ Working to extend the Eco rating project to Brazil market to measure the environmental impact of smartphones ▪ Evaluating the partnership with Open-es to create an
	ecosystem of sustainable value chains
	▪ Completed the selection for "TIM Challenge for Circular
Innovating through sustainability	economy", the winner will be communicated by June '22 ▪ Tender launched for the development of the Carbon
	Calculator
	▪ Launched gamification initiatives for employees and customers during Earth day to promote sustainable
Rising the level	behaviour
of employees' motivation	▪ Implementing a sustainable survey for TIM Retail stores on
	layout, TIM Green offer, inclusion and ESG training of employees (by May '22)

From EBITDA to Net Income

Reported data, € m, Rounded numbers

Liquidity margin - After Lease view Cost of debt ~3.4%, flat QoQ, +0.1pp YoY

(1) Includes € 285m repurchase agreements o/w € 85m will expire in April 2022, € 150m will expire in May 2022 and € 50m will expire in June 2022 (2) € 22,547m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 669m) and current financial liabilities (€ 920m), the gross debt figure of € 24,136m is reached

Cost of debt ~3.8%*, +0.1pp QoQ and +0.2pp YoY Liquidity margin - IFRS 16 view

* Including cost of all leases

(1) Includes € 285m repurchase agreements o/w € 85m will expire in April 2022, € 150m will expire in May 2022 and € 50m will expire in June 2022

(2) € 27,595m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 698m) and current financial liabilities (€ 920m), the gross debt figure of € 29,213m is reached

Well diversified and hedged debt - IFRS 16 view TIM Group

€ m	NFP adjusted	Fair value	NFP accounting
GROSS DEBT
Bonds	17,615	210	17,825
Banks & EIB	5,831		5,831
Derivatives	194	967	1,161
Op. leases and long rent	5,077		5,077
Other	496		496
TOTAL	29,213	1,177	30,390
FINANCIAL ASSETS
Liquidity position	5,228		5,228
Other	1,346	970	2,316
o/w derivatives	962	970	1,932
o/w active leases	111		111
o/w other credit (1)	273		273
TOTAL	6,574	970	7,544
NET FINANCIAL DEBT	22,639	207	22,846

Average m/l term maturity: 7.3 years (bond 7.0 years only)

Fixed rate portion on medium-long term debt ~80%

Around 31% of outstanding bonds (nominal amount) denominated in USD and GBP and fully hedged

TIM Group financial expectations for '22-'24 based on current configuration

IFRS 16/After Lease, including OI

	Short term ('22)	Long term
Service Revenues	low single digit decrease	low single digit growth ( '21-'24 CAGR)
Organic EBITDA	low teens decrease	flat ( '21-'24 CAGR)
Organic EBITDA AL (1)	mid to high teens decrease	low single digit decrease ( '21-'24 CAGR)
CAPEX	Group: €4.0bn Domestic: €3.2bn	Group: €3.9bn in '23, €3.8bn in '24 Domestic: €3.1bn in '23, €3.0bn in '24 and trending to <15% in the M/L term (by '30)
Adj. Net Debt AL	affected by € 3.7bn non-recurring payments (2)	Oi acquisition impact on leverage fully absorbed by '25

Some headwinds affecting 2022 domestic EBITDA and group net debt

Opportunities that need to be financed: accelerating FTTH/5G and Digital Companies' investments to shorten path to sustainable cash flow generation

TIM Brasil

TIM Brasil 2022-'24 guidance

GOALS	SHORT TERM TARGETS (2022)	LONG TERM TARGETS (2022-'24)
Revenue Sustainability	Service Revenues Growth: + Double digit YoY	Service Revenues Growth: + Double digit CAGR '21-'24
Profitability	EBITDA Growth: + Double digit YoY	EBITDA Growth: + Double digit CAGR '21-'24	reform
Infrastructure Development	Capex: ~R\$ 4.8bn	Capex: ~R\$ 14.0bn ∑ '22-'23 Capex on Revenues: <20% @2024
Cash Generation	EBITDA-Capex on Revenues: >24%	EBITDA-Capex on Revenues: ≥29% @2024	the old plan

• Any additional M&A activity
• New spectrum auctions
• ICMS taxation changes (ruled to be effective in Q1 '24)
• Any other taxation or Regulatory
• Upside from Customer Platform partnerships (e.g. value created by equity stakes)

On like-for-like comparison, all metrics would be on track versus

For further questions please contact the IR team

Investor\_relations@telecomitalia.it

www.gruppotim.it

www.twitter.com/TIMNewsroom

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