Telecom Italia Rsp

Quarterly Report • Aug 1, 2019

Q2 '19 Financial and Operating Figures - IFRS 9/15 and "After Lease"

Index

Disclaimer

Key financial data by Business Unit Key financial data by Quarter P&L Group Balance Sheet Net Debt & Cashflow Domestic Business Results Domestic Mobile investor\_relations@telecomitalia.it TIM Brasil Results Website link: Reported_Organic Telecom Italia Group After Lease View Telecom Italia Investor Relations

Domestic Wireline TELECOM ITALIA INVESTOR RELATIONS

Disclaimer

The 2Q'19 and 1H'19 financial and operating data have been extracted or derived, with the exception of some data, from the TIM Group Half-year Condensed Consolidated Financial Statements as of and for the six months ended 30 June 2019, which has been prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the European Union (designated as "IFRS").

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 2019 has not yet been completed.

The accounting policies and consolidation principles adopted in the preparation of the TIM Group Half-year Condensed Consolidated Financial Statements as of and for the six months ended 30 June 2019 are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2018, to which reference can be made, except for the adoption of the new accounting principle (IFRS 16 - Lease), adopted starting from 1 January 2019. In particular, TIM adopts IFRS 16, using the simplified retrospective approach, without restatement of prior period comparatives. The implementation of the new standard has not been fully completed; the impact of the adoption of IFRS 16 is unaudited and may be subject to change until the publication of TIM's 2019 Annual Report. It should be noted that, starting from 1 January 2018, the TIM Group adopted IFRS 15 (Revenues from contracts with customers) and IFRS 9 (Financial instruments). To enable the year-on-year comparison of the economic and financial performance for the first half of 2019, "IFRS 9/15" income statement figures, prepared in accordance with the previous accounting standards applied (IAS 17 and related Interpretations) are provided, for the purposes of the distinction between operating leases and financial leases and the consequent accounting treatment of lease liabilities.

Alternative Performance Measures

The TIM Group, in addition to the conventional financial performance measures established by IFRS, uses certain alternative performance measures in order to present a better understanding of the trend of operations and financial condition. 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 and net financial debt. Moreover, following the adoption of IFRS 16, the TIM Group provides the following further financial indicators:

* EBITDA adjusted After Lease ("EBITDA-AL"), which is calculated by adjusting Organic EBITDA, net of non-recurring items, of the amounts related to the accounting treatment of finance lease contracts in accordance with IAS 17 (applied until the end of 2018) and IFRS 16 (applied from 2019);

* Adjusted Net Financial Debt After Lease, which is calculated by excluding from the adjusted net financial debt the liabilities related to the accounting treatment o f finance lease contracts in accordance with IAS 17 (applied until the end of 2018) and IFRS 16 (applied from 2019); Such alternative performance measures are unaudited.

* * * As described in 2018 Annual Report of the TIM Group, improvements - also on the supporting IT systems - relating to the process of implementing the new accounting standards adopted in 2018, together with the high number of new commercial offers, have entailed, for certain specific kinds of fixed and mobile contracts, a recalculation of the time distribution of the revenues in the first and second quarters of 2018 and presentation of the income statement figures of the first two quarters of 2018, as well as of the first half of 2018. Such data are unaudited.

Key financial data by Business Unit

€m, IFRS 9/15

	Q1 '18	H1 '18	Q1 '19	H1 '19	Q1 '18 AL	H1 '18 AL	Q1 '19 AL	H1 '19 AL
REVENUES Reported
Domestic	3,657	7,423	3,502	7,069
Brazil	1,033	2,001	979	1,946
Other activities & Elim.	(5)	(13)	(10)	(21)
TI Group	4,685	9,411	4,471	8,994
REVENUES net non recurring items
Domestic	3,657	7,423	3,516	7,084
Brazil	1,033	2,001	979	1,946
Other activities & Elim.	(5)	(13)	(10)	(21)
TI Group	4,685	9,411	4,485	9,009
EBITDA Reported
Domestic	1,446	3,037	1,447	2,749	1,365	2,866	1,377	2,610
Brazil	353	704	347	1,321	335	669	325	1,286
Other activities & Elim.	(6)	(8)	(2)	(5)	(6)	(8)	(2)	(5)
TI Group	1,793	3,733	1,792	4,065	1,694	3,526	1,700	3,892
EBITDA net non recurring items (1)
Domestic	1,541	3,158	1,481	3,027	1,460	2,987	1,411	2,888
Brazil	353	704	347	711	335	669	325	676
Other activities & Elim.	(6)	(8)	(2)	(5)	(6)	(8)	(2)	(5)
TI Group	1,888	3,854	1,826	3,733	1,789	3,647	1,734	3,560
EBIT Reported
Domestic	615	1,371	581	1,012
Brazil	131	252	107	863
Other activities & Elim.	(6)	(9)	(3)	(4)
TI Group	740	1,614	685	1,871
CAPEX (2)
Domestic	507	1,212	455	1,114
Brazil	153	385	152	367
TI Group	660	1,597	607	1,481

(1) See page "After Lease View" for organic after lease data (2) In FY 2018 €2,399m for 5G spectrum

Key BU financial data by Quarter

€m, IFRS 9/15

	Q1 '18	Q2 '18	Q1 '19	Q2 '19	Q1 '18 AL	Q2 '18 AL	Q1 '19 AL	Q2 '19 AL
REVENUES Reported
Domestic	3,657	3,766	3,502	3,567
Brazil	1,033	968	979	967
Other activities & Elim.	(5)	(8)	(10)	(11)
TI Group	4,685	4,726	4,471	4,523
REVENUES net non recurring items
Domestic	3,657	3,766	3,516	3,568
Brazil	1,033	968	979	967
Other activities & Elim.	(5)	(8)	(10)	(11)
TI Group	4,685	4,726	4,485	4,524
EBITDA Reported
Domestic	1,446	1,591	1,447	1,302	1,365	1,501	1,377	1,233
Brazil	353	351	347	974	335	334	325	961
Other activities & Elim.	(6)	(2)	(2)	(3)	(6)	(2)	(2)	(3)
TI Group	1,793	1,940	1,792	2,273	1,694	1,832	1,700	2,192
EBITDA net non recurring items (1)
Domestic	1,541	1,617	1,481	1,546	1,460	1,527	1,411	1,477
Brazil	353	351	347	364	335	334	325	351
Other activities & Elim.	(6)	(2)	(2)	(2)	(6)	(2)	(2)	(3)
TI Group	1,888	1,966	1,826	1,907	1,789	1,858	1,734	1,826
EBIT Reported
Domestic	615	756	581	431
Brazil Other activities & Elim.	131	121	107	756
TI Group	(6) 740	(3) 874	(3) 685	(1) 1,186
CAPEX (2) Domestic	507	705	455	659
Brazil	153	232	152	215
TI Group	660	937	607	874

(1) See page "After Lease View" for organic after lease data

(2) In 4Q 2018 €2,399m for 5G spectrum

P&L Group UNAUDITED FIGURES

€m, IFRS 9/15

Attributable to:

	Q1 '18	H1 '18	Q1 '19	H1 '19	Q1 '18 AL	H1 '18 AL	Q1 '19 AL	H1 '19 AL
REVENUES	4,685	9,411	4,471	8,994
Other Income	57	144	46	766
TOTAL OPERATING REVENUES AND OTHER INCOME	4,742	9,555	4,517	9,760
Acquisition of goods and services	(1,996)	(3,980)	(1,749)	(3,524)
Employee benefits expenses	(780)	(1,526)	(740)	(1,502)
Other operating expenses	(368)	(661)	(309)	(871)
Internally generated assests and Others	195	345	73	202
EBITDA	1,793	3,733	1,792	4,065	1,694	3,526	1,700	3,892
EBITDA Margin	38.3%	39.7%	40.1%	45.2%	36.2%	37.5%	38.0%	43.3%
Depreciation and amortization	(1,055)	(2,122)	(1,108)	(2,186)
Gains (losses) on disposals of non-current assets	2	3	1	(8)
Impairment reversals (losses) on non-current assets	-	-	-	-
EBIT	740	1,614	685	1,871
EBIT Margin	15.8%	17.2%	15.3%	20.8%
Income (loss) equity invest. valued equity method	8	8	(4)	(1)
Net Financial Income / (Expenses)	(357)	(718)	(327)	(650)
Profit (loss) before tax from continuing operations	391	904	354	1,220
Income tax expense	(156)	(297)	(128)	(422)
Profit (loss) from continuing operations	235	607	226	798
Profit (loss) from Discontinued operations/Non-current assets held for sale	-	-	-	-

Profit (loss) for the year 235 607 226 798

Owners of the Parent 199 532 193 592 Non-controlling interests 36 75 33 206

Consolidated Balance Sheet

€m, IFRS 9/15 & IFRS 16 from January 1th, 2019

	FY '18	Q1 '19	Q1 '19 IFRS 16	H1 '19	H1 '19 IFRS 16
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill	26,769	26,780	26,780	26,784	26,784
Intangible assets with a finite useful life	8,889	8,205	8,205	8,006	8,006
	35,658	34,985	34,985	34,790	34,790
Tangible assets
Property, plant and equipment owned	14,251	14,086	14,086	14,089	14,089
Assets held under finance leases	1,895	-	-
	16,146	14,086	14,086	14,089	14,089
Right of Use assets	-	2,321	5,735	2,328	5,803
Other non-current assets
Investments in associates and joint ventures accounted for using the equity method	16	12	12	12	12
Other investments	49	52	52	54	54
Non-current financial assets	1,594	1,880	1,885	2,085	2,090
Miscellaneous receivables and other non-current assets	2,291	2,296	2,296	2,944	2,944
Deferred tax assets	1,136	1,238	1,253	1,074	1,077
	5,086	5,478	5,498	6,169	6,177
TOTAL NON-CURRENT ASSETS (A)	56,890	56,870	60,304	57,376	60,859
CURRENT ASSETS
Inventories	389	325	325	316	316
Trade and miscellaneous receivables and other current assets	4,706	5,177	5,138	5,026	4,990
Current income tax receivables	251	71	71	83	83
Other investments	-	-	-	-	-
Securities other than investments, financial receivables and other current financial assets	1,466	1,639	1,643	1,160	1,164
Cash and cash equivalents	1,917	2,103	2,103	1,700	1,700
TOTAL CURRENT ASSETS (B)	8,729	9,315	9,280	8,285	8,253
TOTAL ASSETS (A+B)	65,619	66,185	69,584	65,661	69,112

Consolidated Balance Sheet

€m, IFRS 9/15 & IFRS 16 from January 1th, 2019

	FY '18	Q1 '19	Q1 '19 IFRS 16	H1 '19	H1 '19 IFRS 16
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity holders of the Parent	19,528	19,635	19,612	19,983	19,949
Equity attributable to Minority Interests	2,219	2,215	2,207	2,400	2,385
TOTAL EQUITY (C)	21,747	21,850	21,819	22,383	22,334
NON-CURRENT LIABILITIES
Non-current financial liabilities	25,059	26,347	29,340	27,418	30,493
o/w liabilities for passive leases	1,740	1,761	4,754	1,739	4,814
Employee benefits	1,567	1,545	1,545	1,417	1,417
Deferred tax liabilities	192	236	236	335	313
Provisions	876	861	861	993	993
Miscellaneous payables and other non-current liabilities	3,297	3,294	3,294	3,348	3,348
TOTAL NON-CURRENT LIABILITIES (D)	30,991	32,283	35,276	33,511	36,564
CURRENT LIABILITIES
Current financial liabilities	5,913	5,065	5,584	2,954	3,485
o/w liabilities for passive leases	208	176	695	174	705
Trade and miscellaneous payables and other current liabilities	6,901	6,922	6,840	6,731	6,647
Current income tax payables	67	65	65	82	82
Current liabilities sub-total (E)	12,881	12,052	12,489	9,767	10,214
Liabilities directly associated with Discontinued operations / Non-current assets held for sale
of a financial nature	-	-	-	-	-
of a non-financial nature	-	-	-	-	-
	-	-	-	-	-
TOTAL CURRENT LIABILITIES (E)	12,881	12,052	12,489	9,767	10,214
TOTAL LIABILITIES (F=D+E)	43,872	44,335	47,765	43,278	46,778
TOTAL EQUITY AND LIABILITIES (C+F)	65,619	66,185	69,584	65,661	69,112

Net Cash Flow & Net Debt Dynamics

UNAUDITED FIGURES

€m, IFRS 9/15

	Q1 '18	H1 '18	9M '18	FY '18	Q1 '19	H1 '19
EBITDA	1,793	3,733	5,778	7,403	1,792	4,065
CAPEX	(660)	(1,597)	(2,460)	(6,408)	(607)	(1,481)
o/w spectrum				(2,399)	-	-
CHANGE IN WORKING CAPITAL (1)	(1,150)	(1,250)	(1,861)	1,082	(644)	(1,094)
Net operating Free Cash Flow	(17)	886	1,457	2,077	541	1,490
Cash Taxes	(24)	(37)	(325)	(739)	(19)	(22)
Financial Expenses	(335)	(665)	(994)	(1,302)	(296)	(610)
Dividends and change in Equity	-	(211)	(217)	(234)	(25)	(241)
Other impacts (FX, M&A, IAS and Other impacts)	147	194	197	236	(11)	(78)
Reduction/(Increase) in adjusted net financial debt from continuing operations	(229)	167	118	38	190	539
Reduction / (Increase) in net financial debt from Discontinued operations / Non-current assets held for sale	-	-	-	-	-	-
Reduction/(Increase) in adjusted net financial debt	(229)	167	118	38	190	539
OPENING NET FINANCIAL DEBT (Adjusted)	25,308	25,308	25,308	25,308	25,270	25,270
Net cash flow	(229)	167	118	38	190	539
ENDING NET FINANCIAL DEBT (Adjusted)	25,537	25,141	25,190	25,270	25,080	24,731
IAS 17				(1,948)	(1,937)	(1,913)
ENDING NET FINANCIAL DEBT AFTER LEASE (Adjusted)				23,322	23,143	22,818

(1) See details in tab "Working Capital" (2) Includes the change in trade payables for amounts due to fixed asset suppliers

Domestic Business Results - Reported Figures

€m, IFRS 9/15

	Q1 '18	Q2 '18	Q3 '18	Q4 '18	FY '18	Q1 '19	Q2 '19	FY '18 AL	Q1 '19 AL	Q2 '19 AL
REVENUES	3,657	3,766	3,759	3,849	15,031	3,502	3,567
Services	3,294	3,354	3,397	3,307	13,352	3,155	3,231
Mobile Services	1,034	1,044	1,069	960	4,107	916	943
Retail	946	942	931	880	3,699	832	830
Wholesale and Other	88	102	138	80	408	84	114
Wireline Services	2,402	2,458	2,468	2,546	9,875	2,394	2,416
Retail	1,607	1,618	1,639	1,660	6,524	1,630	1,610
Domestic Wholesale (1)	512	510	515	529	2,066	501	568
International Wholesale	286	323	310	353	1,272	238	231
Elimination & Other	(142)	(148)	(140)	(199)	(630)	(155)	(128)
Equipments	363	412	362	542	1,679	347	336
EBITDA	1,446	1,591	1,702	1,216	5,955	1,447	1,302	5,625	1,377	1,233
EBITDA Margin	39.5%	42.2%	45.3%	31.6%	39.6%	41.3%	36.5%	37.4%	39.3%	34.6%
CAPEX (2)	507	705	675	3,631	5,518	455	659
% on revenues	13.9%	18.7%	* 18.0%	* 94.3%	* 36.7%	* 13.0%	* 18.5%		*	*
KPIs
Headcount EoP	49,722	49,658	49,532	48,200	48,200	48,114	(3) 47,891

(1) Organization view (2) Includes 630 mln € GSM Licences in 3Q'17 and €2,399m for 5G Licenses in 4Q'18 (3) 1,266 exits ex. Art.4 Fornero Law to be accounted in July

Domestic Wireline Results - Reported Figures

€m, IFRS 9/15

	Q1 '18		Q2 '18		Q3 '18		Q4 '18		FY '18		Q1 '19		Q2 '19
KPIs		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Retail - physical accesses ('000)	10,845	-3.4%	10,644	-4.8%	10,450	-6.2%	10,149	-8.1%	10,149	-8.1%	9,876	-8.9%	9,530	-10.5%
Retail - accesses including VoIP ('000)	11,285	-1.5%	11,203	-2.0%	11,102	-2.9%	10,864	-4.8%	10,864	-4.8%	10,580	-6.2%	10,223	-8.7%
Retail - broadband ('000)	7,527	4.6%	7,547	3.7%	7,561	1.8%	7,483	-0.3%	7,483	-0.3%	7,354	-2.3%	7,414	-1.8%
Business	1,426	-1.1%	1,415	-2.1%	1,392	-3.5%	1,377	-4.5%	1,377	-4.5%	1,353	-5.2%	1,340	-5.3%
Consumer	6,101	6.1%	6,132	5.1%	6,169	3.1%	6,106	0.6%	6,106	0.6%	6,001	-1.6%	6,075	-0.9%
FTTx (NGN)	2,458	102.0%	2,744	82.1%	2,955	68.5%	3,166	47.3%	3,166	47.3%	3,345	36.1%	3,428	24.9%
ARPU Broadband (€/month)	24.9		25.2		27.1		28.0		26.3		29.0	16.2%	29.6	17.2%
ARPU Consumer (€/month)	32.6		33.0		34.9		35.5		34.0		35.6	9.4%	35.7	8.3%
Wholesale - OLO Accesses ('000)	8,065	3.3%	8,078	2.5%	8,114	2.8%	8,063	1.4%	8,063	1.4%	8,093	0.3%	8,079	0.0%
Local Loop Unbundling (LLU)	5,241	-7.6%	5,011	-11.1%	4,788	-14.0%	4,444	-18.2%	4,444	-18.2%	4,149	-20.8%	3,900	-22.2%
Wholesale Line Rental	291	-22.1%	274	-20.9%	257	-22.0%	242	-20.4%	242	-20.4%	228	-21.5%	230	-16.1%
Bitstream Naked	1,228	-4.2%	1,194	-5.7%	1,165	-5.3%	1,115	-9.2%	1,115	-9.2%	1,100	-10.4%	1,081	-9.5%
VULA - FTTx (NGN)	1,306	171.7%	1,598	153.0%	1,904	149.6%	2,262	129.4%	2,262	129.4%	2,616	100.4%	2,869	79.6%

	Q1 '18	Q2 '18	Q3 '18	Q4 '18	FY '18	Q1 '19		Q2 '19
REVENUES							D % yoy		D % yoy
TOTAL WIRELINE REVENUES	2,538	2,593	2,572	2,774	10,477	2,535	-0.1%	2,586	-0.3%
Wireline Service Revenues	2,402	2,458	2,468	2,546	9,875	2,394	-0.3%	2,416	-1.7%
Retail Services	1,607	1,618	1,639	1,660	6,524	1,630	1.5%	1,610	-0.5%
o/w Broadband and content	563	569	614	634	2,380	645	14.6%	647	13.7%
o/w ICT Services	165	186	189	216	756	192	16.0%	215	15.7%
Domestic Wholesale (1)	512	510	515	529	2,066	501	-2.1%	568	11.4%
International Wholesale	286	323	310	353	1,272	238	-16.8%	231	-28.5%
Subsidiaries, adj. and other	-3	7	5	5	13	24		7
Equipments	136	135	104	228	602	141	3.6%	170	26.2%

(1) Organization view

Legenda

	Wireline - KPIs
Retail - physical accesses	Fixed line physical accesses, including both voice and broadband (xDSL, FTTx)
Retail - accesses including VoIP	Included in the counting also multiple VoIP lines on a single physical access line
Retail - broadband	All active broadband lines, including xDSL and FTTx
Business	Active broadband lines on Corporate and Small/Medium enterprises
Consumer	Active broadband lines on Consumer customers
FTTx (NGN)	All active fiber line retail customers, FTTC and FTTH
ARPU Broadband (€/month)	Total broadband revenues (Consumer+Business) divided by average active broadband customers (€/line/month)
ARPU Consumer (€/month)	Total retail consumer service revenues divided by average active consumer lines (€/line/month)
Wholesale - OLO Accesses	Total number of wholesale lines
Local Loop Unbundling (LLU)	Nr. of wholesale accesses to the copper local access network (SULL, VULL and NGA included)
Wholesale Line Rental	Nr. of rented wholesale lines enabling OLOs to resell basic and advanced telephone and associated services
Bitstream Naked	Nr. of wholesale copper access lines with no RTG/ISDN/WLR voice service, used by OLOs for ADSL data service.
VULA - FTTx (NGN)	Nr. of virtual, bitstream-type accesses on TI's fiber network

	Wireline - Revenues
TOTAL WIRELINE REVENUES	Total revenues of Domestic Wireline, including services and equipment
Wireline Service Revenues	Including retail, domestic wholesale, Sparkle (TIS Group), adjustments and eliminations
Retail Services	Retail service revenues: consumer + business
o/w Broadband and content	Data services (xDSL, FTTx), TIM Vision and other contents, TIM Game
o/w ICT Services	Cloud, Security, IT and other B2B services
Domestic Wholesale	Revenues from OLOs, regulated and not regulated (organization view)
International Wholesale	TIM Sparkle Group revenues
Subsidiaries, adj. and other	Intercompany adjustment, elimination and national Subsidiaries (Telsy, TI Trust, Olivetti)
Equipments	Equipment sold, including consumer (routers, set-top-box, etc) and B2B (IRU, IT hardware, local networks equipment, etc)

Domestic Mobile Results - Reported Figures

€m, IFRS 9/15

	Q1 '18		Q2 '18	Q3 '18		Q4 '18		FY '18 Q1 '19		Q2 '19
KPIs		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy	D % yoy
Total number of lines ('000)	31,036	5.5%	31,629		5.6% 31,994	5.6%	31,818	3.5%	31,818	3.5%	31,748	2.3%	31,662	0.1%
o/w Calling	27,366	7.6%	28,117		8.0% 28,556	7.4%	28,236	4.6%	28,236	4.6%	28,068	2.6%	28,051	-0.2%
Human lines	23,195	-0.3%	23,132	-1.5%	22,738	-2.7%	22,448	-3.8%	22,448	-3.8%	22,256	-4.0%	21,956	-5.1%
o/w Human Calling	19,525	1.3%	19,621		0.3% 19,299	-1.9%	18,866	-3.6%	18,866	-3.6%	18,576	-4.9%	18,345	-6.5%
Non Human lines (M2M)	7,841	27.3%	8,496	31.3%	9,256	34.0%	9,370	26.2%	9,370	26.2%	9,492	21.1%	9,706	14.2%
Churn Rate %	6.5%	0.6pp	6.0%	-0.9pp	7.6%	0.6pp	6.2%	-0.3pp	26.3%	0.1pp	5.2%	-1.4pp	4.3%	-1.7pp
Total User Broadband (mln users)	13.3	9.2%	13.6	8.6%	13.4	3.1%	13.0	-1.2%	13.0	-1.2%	13.1	-1.4%	13.1	-3.4%
Total User LTE (mln users)	10.1	21.9%	10.4	16.2%	10.4	10.9%	10.3	6.1%	10.3	6.1%	10.4	3.0%	10.6	1.4%
Volumes of traffic (mln minutes)	21,168		16.4% 21,616		11.9% 20,541	5.7%	22,037	3.9%	85,363	9.2%	22,309	5.4%	22,629	4.7%
Outgoing traffic volumes	14,080		19.5% 14,468		14.6% 13,705	7.3%	14,793	4.3%	57,046	11.1%	15,136	7.5%	15,537	7.4%
Incoming traffic volumes	7,088	10.7%	7,148	7.0%	6,836	2.5%	7,245	3.1%	28,316	5.7%	7,172	1.2%	7,092	-0.8%
Usage Voice (min/line/month)	304	17.2%	311	13.0%	299	8.1%	326	7.4%	310	11.2%	333	9.7%	341	9.7%
Usage Data (GB/users/month)	3.6	55.9%	4.1	51.5%	4.9	51.6%	5.5	67.1%	4.5	56.0%	5.6	56.5%	6.5	60.3%
ARPU (€ / line / month)
Reported €	10.2		10.0		9.8		9.2		9.8		8.7	-14.5%	8.7	-13.0%
Human €	13.6		13.6		13.5		13.0		13.4		12.4	-8.5%	12.5	-7.7%
	Q1 '18		Q2 '18		Q3 '18		Q4 '18		FY '18		Q1 '19		Q2 '19
REVENUES												D % yoy		D % yoy
TOTAL MOBILE REVENUES		1,262		1,321		1,328		1,274		5,185	1,122	-11.1%	1,111	-15.9%
(1) Mobile Service Revenues		1,034		1,044		1,069		960		4,107	916	-11.4%	943	-9.6%
Retail Services		946	942			931		880 3,699		832	-12.1%	830	-11.9%
o/w Incoming		73		74		70		73		289	67	-7.0%	67	-8.7%
Wholesale and Other		88		102		138		80		408	84	-4.4%	114	12.1%

Handsets and Handsets Bundle 206 -9.6% 168 -39.5%

259

277

228

1,078

314

(1) 4Q'18 MSR including non linear items (€34 mln)

Legenda

	Mobile KPIs
Total number of lines	Total mobile customer base, human and not human ('000)
o/w Calling	Nr. of active lines (calling at least once within the last month of the reported quarter)
Human lines	Total nr. of human lines
o/w Human Calling	Nr. of human active lines (calling at least once within the last month of the reported quarter)
Non Human lines (M2M)	Total nr. of not human lines, including machine to machine and data-only SIMs (eg. for tablets)
Churn Rate %	Percentage of line lost on average nr of lines in the reported period
Total User Broadband	Mobile customers using data services
Total User LTE	Mobile customer using (also) 4G (LTE) data services
Volumes of traffic	Incoming + Outgoing volumes (Visitors and Roamers volumes excluded, MVNO included), mln of minutes
Outgoing traffic volumes	Outgoing voice traffic (mln of minutes), excluding visitors and roamers
Incoming traffic volumes	Total amount of incoming voice traffic excluding visitors (mln of minutes)
Usage Voice	Average (human-lines) voice usage (min/human lines/month)
Usage Data	Average data usage (GB/broadband users/month)
ARPU	Average Revenue per User (€ / line / month)

	Mobile REVENUES
TOTAL MOBILE REVENUES	Total mobile revenues, including services, handsets and handsets bundle
Mobile Service Revenues	Mobile service revenues, including retail, wholesale and other
Retail Services	Retail service revenues, consumer and business including voice, messaging, browsing and content
o/w Incoming	Revenues for voice traffic terminated on TIM mobile customers including visitors
Wholesale and Other	Inwit revenues, colocation on mobile sites, MVNOs and visitors
Handsets and Handsets Bundle	Mobile handsets sales and handsets bundles

TIM Brasil Results - Reported Figures

R\$m, IFRS 9/15

	Q1 '18 D % yoy		Q2 '18 D % yoy		Q3 '18 D % yoy		Q4 '18 D % yoy		FY '18 D % yoy		Q1 '19 D % yoy		Q2 '19 D % yoy
KPI's - Mobile only
Estimated Total Penetration (%)	113.0%		112.7%		111.8%		####		####		108.9%	-4.1pp	108.7%	-4.0pp
Market Share on total lines (%)	24.6%	-0.9pp	24.1%	-1.1pp	24.0%	-0.6pp	24.4%	-0.4pp	24.4%	-0.4pp	24.1%	-0.5pp	(1) 24.1%	0,0pp
Total Lines ('000) (2)	57,894		-6.4% 56,554		-7.0% 56,241		-5.3% 55,923		-4.6% 55,923	-4.6%	55,083	-4.9%	54,972	-2.8%
TOTAL ARPU (3)	21.7		21.9		22.6		23.7		22.5		22.8	+5.3%	23.2	+5.8%
TOTAL MOU net of visitors	115	+8%	122	+15%	129	+16%	127	+11%	123.4	+12%	124	+7%	124	+1%
	Q1 '18		Q2 '18		Q3 '18		Q4 '18		FY '18		Q1 '19		Q2 '19
MAIN RESULTS (IAS/IFRS)												D % yoy		D % yoy
REVENUES Reported		4,120		4,162		4,242		4,457		16,981	4,191	1.7%	4,263	2.4%
of which services		3,986		3,968		4,031		4,221		16,206	4,025	1.0%	4,063	2.4%
of which handsets		134		194		211		236		775	166	23.9%	200	3.1%
EBITDA Reported		1,407		1,508		1,594		1,807		6,316	1,485	5.5%	4,253	182.0%
EBITDA margin		34.2%		36.2%		37.6%		40.5%		37.2%	35.4%	1,2pp	99.8%	63,6pp
EBITDA Organic		1,407		1,508		1,594		1,804		6,313	1,485	5.5%	1,603	6.3%
EBITDA margin		34.2%		36.2%		37.6%		40.5%		37.2%	35.4%	1,2pp	37.6%	1,4pp
CAPEX Reported		613		981		866		1,371		3,831	650	6.0%	945	-3.7%
% on revenues		14.9%		23.6%		20.4%		30.8%		22.6%	15.5%	0,6pp	22.2%	-1,4pp
	Q1 '18		Q2 '18		Q3 '18		Q4 '18		FY '18		Q1 '19		Q2 '19
Exchange rate AVG YTD (R\$ vs. euro)	3.99014		4.14011		4.29236		4.30628		4.30628		4.27983		4.34394

(1) Internal estimate (2) Includes company lines (3) Gross of visitors

Reported & Organic Figures: YoY trends

UNAUDITED FIGURES

€m
			Q2 '18				Q2 '19
	Reported Figures	Change in consolid. area	Non Organic elements Exchange rate impact	Non recurring items	Organic figures (*)	Reported Figures	Non recurring items	Organic figures (*)	Δ% yoy reported	Δ% yoy organic (*)
REVENUES
Domestic	3,766		- 4	-	3,770	3,567	(1)	3,568	-5.3%	-5.4%
Brazil	968		- (24)	-	944	967	-	967	-0.1%	2.4%
Other Activities & Eliminations	(8)		- -	-	(8)	(11)	-	(11)
TI Group	4,726		- (20)	-	4,706	4,523	(1)	4,524	-4.3%	-3.9%
EBITDA
Domestic	1,591		- 1	(26)	1,618	1,302	(244)	1,546	-18.2%	-4.4%
Brazil	351		- (9)	-	342	974	610	364	177.5%	6.3%
Other Activities & Eliminations	(2)		-	-	(2)	(3)	-	(3)
TI Group	1,940		- (8)	(26)	1,958	2,273	366	1,907	17.2%	-2.6%
EBIT
Domestic	756		- -	(26)	782	431	(244)	675	-43.0%	-13.7%
Brazil	121		- (3)	-	118	756	610	146	524.8%	23.5%
Other Activities & Eliminations	(3)		- -	-	(3)	(1)	-	(1)
TI Group	874		- (3)	(26)	897	1,186	366	820	35.7%	-8.6%

(*) Organic: excluding exchange rate fluctuations & non-recurring items

"After Lease" View

€m

	Q2' 18			Q2' 19				H1' 18		H1' 19
	IFRS 9/15	Δ IAS 17	AL	IFRS 9/15	Δ IAS 17	AL	IFRS 9/15	Δ IAS 17	AL	IFRS 9/15	Δ IAS 17	AL
EBITDA Reported
Domestic	1,591	(90)	1,501	1,302	(69)	1,233	3,037	(171)	2,866	2,749	(139)	2,610
Brazil	351	(17)	334	974	(13)	961	704	(35)	669	1,321	(35)	1,286
Other activities & Elim.	(2)	-	(2)	(3)	-	(3)	(8)	-	(8)	(5)	-	(5)
TI Group	1,940	(108)	1,832	2,273	(81)	2,192	3,733	(207)	3,526	4,065	(173)	3,892
EBITDA Organic
Domestic	1,618	(91)	1,527	1,546	(69)	1,477	3,160	(171)	2,989	3,027	(139)	2,888
Brazil	342	(16)	326	364	(13)	351	671	(33)	637	711	(35)	676
Other activities & Elim.	(2)	-	(2)	(3)	-	(3)	(8)	-	(8)	(5)	-	(5)
TI Group	1,958	(107)	1,851	1,907	(81)	1,826	3,823	(205)	3,618	3,733	(173)	3,560

Net Financial Debt (Adjusted) 24,731 (1,913) 22,818