Telecom Italia Rsp

Investor Presentation • Feb 21, 2019

4Q'18 Financial and Operating Figures

Index

Disclaimer Key financial data by Business Unit Key financial data by Quarter P&L Group Balance Sheet Net Debt & Cashflow Working Capital Domestic Business Results TIM Brasil Results Website link: Reported & Organic Figures Telecom Italia Group

Domestic Wireline TELECOM ITALIA INVESTOR RELATIONS

Domestic Mobile investor\_relations@telecomitalia.it

Non linear items Telecom Italia Investor Relations

Disclaimer

The financial and operating data have been extracted or derived, with the exception of some data, from the 2018 Annual Report of the TIM Group examined and approved by the TIM Board of Directors on 21 February 2019, which has been 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 Statements at 31 December 2018 are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2017, to which reference can be made, except for the adoption of the new accounting principles (IFRS 9 - Financial Instruments and IFRS 15 - Revenue from Contracts with Customers) adopted starting from 1 January 2018. As a result of this, the FY2018 financial results are defined as "FY2018 IFRS 9/15", as well as the 4Q2018 financial results are defined as "4Q2018 IFRS 9/15". Furthermore, for comparison purposes, 1Q18, 2Q18, 3Q18, 4Q18, 1H2018, 9M18, and FY2018 as well as 1Q17, 2Q17, 3Q17, 4Q17, 1H2017, 9M17 and FY2017 financial results are also presented in accordance with the prior IFRS on revenues (IAS 18, IAS 11 and related Interpretations) and financial instruments (IAS 39)".

As of today, the audit work by our independent auditors on the TIM Consolidated and Separate Financial Statements for the year ended 31 December 2018 have not yet been completed.

Key financial data by Business Unit

€ mln

UNAUDITED FIGURES

FY17	1Q18	1H18	9M18	FY18	FY18 IFRS 9/15
					15,031
					3,943
(28)	(4)	(13)	(23)	(35)	(34)
19,828	4,742	9,512	14,217	19,109	18,940
15,340	3,709	7,518	11,311	15,247	15,093
3,770	1,037	2,007	2,929	3,959	3,943
(28)	(4)	(13)	(23)	(35)	(34)
					19,002
6,171	1,533	3,200	4,958	6,221	5,955
					1,467
					(19)
					7,403
7,050	1,628	3,321	5,085	6,629	6,363
					1,466
					(18)
					7,811
					16
					564
					(19)
					561
					5,518
					890
					- 6,408
	15,354 4,502 19,082 1,635 (16) 7,790 1,369 (15) 8,404 2,772 535 (16) 3,291 4,551 1,150 5,701	3,709 1,037 4,742 365 (5) 1,893 365 (5) 1,988 678 133 (5) 806 533 162 (1) 694	7,518 2,007 9,512 727 (9) 3,918 727 4,039 1,484 254 (10) 1,728 1,273 402 - 1,675	11,311 2,929 14,217 1,084 (12) 6,030 1,084 (9) (11) 6,158 (12)	15,185 3,959 19,171 1,511 (19) 7,713 1,510 (18) 8,121 393 177 381 569 (19) 762 727 1,975 5,634 598 924 - 2,573 6,558

(1) Details on non linear items in tab 14 (2) In FY 2018 €2,399m for 5G spectrum

Key BU financial data by Quarter

€ mln UNAUDITED FIGURES

	4Q17	1Q18	2Q18	3Q18	4Q18	4Q18 IFRS 9/15
REVENUES Reported
Domestic	4,042	3,709	3,809	3,793	3,874	3,849
Brasile	1,113	1,037	970	922	1,030	1,025
Other activities & Elim.	(6)	(4)	(9)	(10)	(12)	(11)
TI Group	5,149	4,742	4,770	4,705	4,892	4,863
REVENUES Organic (1)
Domestic	4,044	3,709	3,809	3,793	3,936	3,911
Brasile	980	1,037	970	922	1,030	1,025
Other activities & Elim.	(6)	(4)	(9)	(10)	(12)	(11)
TI Group	5,018	4,742	4,770	4,705	4,954	4,925
EBITDA Reported
Domestic	1,116	1,533	1,667	1,758	1,263	1,216
Brasile	465	365	362	357	427	417
Other activities & Elim.	(4)	(5)	(4)	(3)	(7)	(8)
TI Group	1,577	1,893	2,025	2,112	1,683	1,625
EBITDA Organic (1)
Domestic	1,778	1,628	1,693	1,764	1,544	935
Brasile	405	365	362	357	426	418
Other activities & Elim.	(4)	(5)	(4)	(2)	(7)	(8)
TI Group	2,179	1,988	2,051	2,119	1,963	1,345
EBIT Reported
Domestic	265	678	806	(1,091)	(216)	(235)
Brasile	195	133	121	127	188	186
Other activities & Elim.	(3)	(5)	(5)	(2)	(7)	(7)
TI Group	457	806	922	(966)	(35)	(56)
(2) CAPEX
Domestic	1,374	533	740	702	3,659	3,631
Brasile	446	162	240	196	326	317
Elim & Adj		(1)	1		-	-
TI Group	1,820	694	981	898	3,985	3,948

(1) Details on non linear items in tab 14 (2) In 4Q 2018 €2,399m for 5G spectrum

P&L Group UNAUDITED FIGURES

€ mln

	FY17	1Q18	1H18	9M18	FY18	FY18 IFRS 9/15
REVENUES	19,828	4,742	9,512	14,217	19,109	18,940
Other Income	523	57	144	200	341	341
TOTAL OPERATING REVENUES AND OTHER INCOME	20,351	4,799	9,656	14,417	19,450	19,281
Acquisition of goods and services	(8,388)	(1,969)	(3,922)	(5,815)	(8,089)	(8,186)
Employee benefits expenses	(3,626)	(773)	(1,509)	(2,151)	(3,084)	(3,105)
Other operating expenses	(1,208)	(359)	(652)	(888)	(1,236)	(1,259)
Internally generated assests and Others	661	195	345	467	672	672
EBITDA	7,790	1,893	3,918	6,030	7,713	7,403
EBITDA Margin	39.3%	39.9%	41.2%	42.4%	40.4%	39.1%
Depreciation and amortization	(4,473)	(1,089)	(2,193)	(5,274)	(4,399)	(4,255)
Gains (losses) on disposals of non-current assets	11	2	3	6	(1)	(1)
Impairment reversals (losses) on non-current assets	(37)	-	-	-	(2,586)	(2,586)
EBIT	3,291	806	1,728	762	727	561
EBIT Margin	16.6%	17.0%	18.2%	5.4%	3.8%	3.0%
Income (loss) equity invest. valued equity method	(19)	8	8	8	9	10
Net Financial Income / (Expenses)	(1,495)	(354)	(715)	(1,041)	(1,341)	(1,348)
Profit (loss) before tax from continuing operations	1,777	460	1,021	(271)	(605)	(777)
Income tax expense	(490)	(174)	(328)	(306)	(433)	(375)
Profit (loss) from continuing operations	1,287	286	693	(577)	(1,038)	(1,152)
Profit (loss) from Discontinued operations/Non-current assets held for sale		-	-	-	0	0
Profit (loss) for the year	1,287	286	693	(577)	(1,038)	(1,152)
Attributable to:
Owners of the Parent	1,121	250	618	(770)	(1,298)	(1,411)
Non-controlling interests	166	36	75	193	260	259

Consolidated Balance Sheet

€ mln

	FY17	FY18	FY18 IFRS 9/15
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill	29,462	26,769	26,769
Intangible assets with a finite useful life	7,192	9,002	8,889
	36,654	35,771	35,658
Tangible assets
Property, plant and equipment owned	14,216	14,251	14,251
Assets held under finance leases	2,331	1,895	1,895
	16,547	16,146	16,146
Other non-current assets
Investments in associates and joint ventures accounted for using the equity method	17	16	16
Other investments	51	47	49
Non-current financial assets	1,768	1,594	1,594
Miscellaneous receivables and other non-current assets	2,422	2,615	2,291
Deferred tax assets	993	1,096	1,136
	5,251	5,368	5,086
TOTAL NON-CURRENT ASSETS (A)	58,452	57,285	56,890
CURRENT ASSETS
Inventories	290	389	389
Trade and miscellaneous receivables and other current assets	4,959	4,813	4,706
Current income tax receivables	77	209	251
Other investments
Securities other than investments, financial receivables and other current financial assets	1,430	1,466	1,466
Cash and cash equivalents	3,575	1,917	1,917
TOTAL CURRENT ASSETS (B)	10,331	8,794	8,729
TOTAL ASSETS (A+B)	68,783	66,079	65,619

€ mln FY17 FY18 FY18 IFRS 9/15 EQUITY AND LIABILITIES EQUITY Equity attributable to equity holders of the Parent 21,557 19,716 19,528 Equity attributable to Minority Interests 2,226 2,225 2,219 TOTAL EQUITY (C) 23,783 21,941 21,747 NON-CURRENT LIABILITIES Non-current financial liabilities 28,108 25,059 25,059 Employee benefits 1,736 1,567 1,567 Deferred tax liabilities 265 222 192 Provisions 825 876 876 Miscellaneous payables and other non-current liabilities 1,678 3,552 3,297 TOTAL NON-CURRENT LIABILITIES (D) 32,612 31,276 30,991 CURRENT LIABILITIES Current financial liabilities 4,756 5,891 5,913 Trade and miscellaneous payables and other current liabilities 7,520 6,904 6,901 Current income tax payables 112 67 67 Current liabilities sub-total (E) 12,388 12,862 12,881 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) 12,388 12,862 12,881 TOTAL LIABILITIES (F=D+E) 45,000 44,138 43,872 TOTAL EQUITY AND LIABILITIES (C+F) 68,783 66,079 65,619 Consolidated Balance Sheet

Net Cash Flow & Net Debt Dynamics

UNAUDITED FIGURES

€ mln

	FY17	FY18	FY18 IFRS 9/15
EBITDA	7,790	7,713	7,403
CAPEX	(5,701)	(6,558)	(6,408)
o/w spectrum	(630)	(2,399)
CHANGE IN WORKING CAPITAL (1)	407	922	1,082
Net operating Free Cash Flow	2,496	2,077	2,077
Cash Taxes	(1,113)	(739)	(739)
Financial Expenses	(1,572)	(1,302)	(1,302)
Dividends and change in Equity	(219)	(234)	(234)
Other impacts (FX, M&A, IAS and Other impacts) o/w IAS 17	219 (68)	236 195	236
Reduction/(Increase) in adjusted net financial debt from continuing operations	(189)	38	38
Reduction/(Increase) in net financial debt from Discontinued operations/Non-current assets held for sale	-	-	-
Reduction/(Increase) in adjusted net financial debt	(189)	38	38
OPENING NET FINANCIAL DEBT (Adjusted)	25,119	25,308	25,308
Net cash flow	(189)	38	38
ENDING NET FINANCIAL DEBT (Adjusted)	25,308	25,270	25,270
Adj for fair value valuation of derivatives and related underlyings	783	703	725
ENDING NET FINANCIAL DEBT (Reported)	26,091	25,973	25,995

(1) See details in tab 8 (2) Includes the change in trade payables for amounts due to fixed asset suppliers

Working Capital UNAUDITED FIGURES

€ mln

	TIM Group		Domestic		Brasil
	FY17	FY18	FY17	FY18	FY17	FY18
Operating WC & Other	407	922	573	946	(188)	(6)
5G License	-	(2,399)	-	(2,399)	-	-
5G License paid in the year	257	513	-	477	257	36
Non recurring items (not paid)	(883)	(408)	(883)	(408)	-	-
Recurring Operating WC	(219)	(1,372)	(310)	(1,384)	69	30
Inventory			(41)	(90)
Trade Receivables			138	(74)
Trade Payables			56	(160)
Other Operating Payables/Receivables & Funds			(463)	(1,061)
- o/w Litigations & Settlements			(95)	-
- o/w Payables vs. Personnel			-	(71)
- o/w Personnel Exit (Fornero Law)			(166)	(267)
- o/w VAT split payment			-	(373)
- o/w Billing (1)			-	(114)
- o/w Deferred Costs & Revenues			(346)	(194)

(1) From payments in advance to payments in arrears

Domestic Business Results - Reported Figures

UNAUDITED FIGURES

€ mln

	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18		FY18 IFRS 9/15
		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
REVENUES	4,042	1.8%	15,354	2.3%	3,709	1.7%	3,809	-1.0%	3,793	-0.7%	3,874	-4.2%	15,185	-1.1%	15,031
Services	3,607	2.1%	14,000	0.9%	3,399	1.7%	3,480	-0.6%	3,518	-0.9%	3,437	-4.7%	13,834	-1.2%	13,650
Equipments	435	-0.7%	1,354	20.0%	310	1.6%	329	-5.3%	275	3.0%	437	0.4%	1,351	-0.2%	1,381
Domestic Mobile Services	1,225	0.5%	4,655	1.6%	1,123	3.7%	1,142	-0.2%	1,169	-2.8%	1,079	-11.9%	4,513	-3.1%	4,405
Traditional	526	-2.1%	2,053	-8.8%	515	3.8%	516	0.8%	499	-3.9%	452	-14.1%	1,982	-3.5%	1,982
Innovative	625	8.3%	2,311	15.1%	551	3.2%	560	0.3%	567	-4.5%	551	-11.9%	2,228	-3.6%	2,121
Wholesale	74	-29.8%	291	-9.3%	57	7.9%	66	-11.2%	104	15.2%	76	2.4%	303	3.9%	302
Domestic Wireline Services	2,524	1.2%	9,952	-0.1%	2,419	-0.2%	2,485	-0.9%	2,492	-0.2%	2,556	1.3%	9,951	0.0%	9,875
Traditional Services	937	-12.4%	3,828	-9.3%	906	-6.3%	902	-7.3%	862	-9.3%	841	-10.3%	3,510	-8.3%	3,485
Innovative Services	753	16.1%	2,825	14.3%	750	15.0%	784	10.7%	820	15.1%	875	16.3%	3,228	14.3%	3,150
Domestic Wholesale	494	1.2%	1,994	-1.9%	491	-2.9%	489	-1.8%	512	2.8%	502	1.7%	1,993	-0.1%	2,021
TIS Group	354	1.7%	1,349	-0.1%	286	-7.7%	323	-3.9%	310	-11.2%	353	-0.3%	1,272	-5.7%	1,272
Subs. Adj. and Other	-13	78.0%		-44 60.0%		-14 -31.5%		-13 -81.8%		-12 13.2%	-15	12.9%		-54 21.6%	-53
Elimination & Other	-143		-607		-143		-147		-143		-198		-629
EBITDA	1,116	-34.5%	6,171	-7.9%	1,533	-5.4%	1,667	-4.2%	1,758	3.8%	1,263	13.2%	6,221	0.8%	5,955
EBITDA Margin	27.6%		40.2%		41.3%		43.8%		46.3%		32.6%		41.0%
CAPEX (1)	1,374	4.8%	4,551	22.7%	533	-15.5%	740	-25.6%	702	-54.7%	3,659	166.3%	5,634	23.8%	5,518
% on revenues	34.0%		29.6%		14.4%		19.4%		18.5%		* n.m.		* n.m.		*
KPIs
Headcount EoP	49,851	-2.8%	49,851	-2.8%	49,722	-2.8%	49,658	-2.8%	49,532	-1.9%	48,200	-3.3%	48,200	-3.3%

(1) Includes 630 mln € GSM Licences in 3Q'17 and €2,399m for 5G Licenses in 4Q'18

Domestic Wireline Results - Reported Figures

	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18
KPIs ('000)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Retail - physical accesses	11,044	-2.1%	11,044	-2.1%	10,845	-3.4%	10,644	-4.8%	10,450	-6.2%	10,149	-8.1%	10,149	-8.1%
Retail - accesses including VoIP	11,407	-1.0%	11,407	-1.0%	11,285	-1.5%	11,203	-2.0%	11,102	-2.9%	10,864	-4.8%	10,864	-4.8%
Retail - broadband	7,510	6.1%	7,510	6.1%	7,527	4.6%	7,547	3.7%	7,561	1.8%	7,483	-0.3%	7,483	-0.3%
Business	1,441	0.3%	1,441	0.3%	1,426	-1.1%	1,415	-2.1%	1,392	-3.5%	1,377	-4.5%	1,377	-4.5%
Consumer	6,068	7.6%	6,068	7.6%	6,101	6.1%	6,132	5.1%	6,169	3.1%	6,106	0.6%	6,106	0.6%
FTTx (NGN)	2,150	117.8%	2,150	117.8%	2,458	102.0%	2,744	82.1%	2,955	68.5%	3,166	47.3%	3,166	47.3%
ARPU Broadband (€/month)	24.9	11.4%	24.3	10.5%	25.5	10.9%	26.1	4.8%	27.4	11.8%	28.7	15.4%	26.9	10.7%
ARPU Consumer (€/month)	33.6	5.1%	33.2	3.7%	32.8	2.7%	33.9	0.4%	35.5	6.4%	36.5	8.7%	34.7	4.5%
Wholesale - OLO Accesses	7,951	3.6%	7,951	3.6%	8,065	3.3%	8,078	2.5%	8,114	2.8%	8,063	1.4%	8,063	1.4%
Local Loop Unbundling (LLU)	5,432	-4.1%	5,432	-4.1%	5,241	-7.6%	5,011	-11.1%	4,788	-14.0%	4,444	-18.2%	4,444	-18.2%
Wholesale Line Rental	304	-21.7%	304	-21.7%	291	-22.1%	274	-20.9%	257	-22.0%	242	-20.4%	242	-20.4%
Bitstream Naked	1,228	-3.6%	1,228	-3.6%	1,228	-4.2%	1,194	-5.7%	1,165	-5.3%	1,115	-9.2%	1,115	-9.2%
VULA - FTTx (NGN)	986	179.2%	986	179.2%	1,306	171.7%	1,598	153.0%	1,904	149.6%	2,262	129.4%	2,262	129.4%

	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18		FY18 IFRS 9/15
REVENUES(€ mln)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
TOTAL	2,763	1.5%	10,689	1.8%	2,579	-0.7%	2,635	-2.4%	2,607	-0.9%	2,791	1.0%	10,611	-0.7%	10,477
Services	2,524	1.2%	9,952	-0.1%	2,419	-0.2%	2,485	-0.9%	2,492	-0.2%	2,556	1.3%	9,951	0.0%	9,875
Equipments	239	5.4%	737	39.0%	160	-6.9%	150	-21.9%	115	-13.9%	235	-1.7%	660	-10.4%	602
TRADITIONAL SERVICES	937	-12.4%	3,828	-9.3%	906	-6.3%	902	-7.3%	862	-9.3%	841	-10.3%	3,510	-8.3%	3,485
Voice	763	-8.1%	3,162	-8.1%	754	-5.9%	718	-11.6%	690	-12.1%	666	-12.7%	2,828	-10.6%	2,809
Business Data & Others trad	174	-27.4%	666	-14.4%	152	-8.2%	185	14.4%	171	4.0%	174	0.4%	682	2.5%	676
INNOVATIVE SERVICES	753	16.1%	2,825	14.3%	750	15.0%	784	10.7%	820	15.1%	875	16.3%	3,228	14.3%	3,150
Broadband and Content	564	18.4%	2,160	15.9%	582	17.1%	596	9.0%	629	13.8%	658	16.6%	2,465	14.1%	2,388
ICT Service	188	9.6%	665	9.2%	168	8.1%	188	16.5%	191	18.9%	217	15.4%	764	14.8%	763
Domestic Wholesale	494	1.2%	1,994	-1.9%	491	-2.9%	489	-1.8%	512	2.8%	502	1.7%	1,993	-0.1%	2,021
TIS Group	354	1.7%	1,349	-0.1%	286	-7.7%	323	-3.9%	310	-11.2%	353	-0.3%	1,272	-5.7%	1,272
Subs. Adj. and Other	-13	78.0%	-44	60.0%	-14	-31.5%	-13	-81.8%	-12	13.2%	-15	12.9%	-54	21.6%	-53

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 divided by all active broadband customers (€/line/month)
ARPU Consumer (€/month)	Total retail consumer service revenues divided by 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	Total revenues of Domestic Wireline, including services and equipment
Services	Including traditional and innovative services, domestic wholesale, Sparkle (TIS Group), adjustments and eliminations
Equipments	Equipment sold, including consumer (routers, set-top-box, etc) and B2B (IRU, IT hardware, local networks equipment, etc)
TRADITIONAL SERVICES
Voice	Line rentals and voice traffic (pay per use/parametric)
Business Data & Others trad	B2B data transmission services (legacy) and value added services (voice)
INNOVATIVE SERVICES
Broadband and Content	Data services (xDSL, FTTx), TIM Vision and other contents, TIM Game
ICT Service	Cloud, Security, IT and other B2B services
Domestic Wholesale	Revenues from OLOs, regulated and not regulated
TIS Group	TIM Sparkle Group revenues
Subs. Adj. and Other	Intercompany adjustment, elimination and national Subsidiaries (Telsy, TI Trust, Olivetti)

Domestic Mobile Results - Reported Figures

UNAUDITED FIGURES

	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18
KPIs		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Total number of lines ('000)	30,755	3.8%	30,755	3.8%	31,036	5.5%	31,629	5.6%	31,994		5.6% 31,818		3.5% 31,818	3.5%
o/w Calling	26,992	5.2%	26,992	5.2%	27,366	7.6%	28,117	8.0%	28,556		7.4% 28,236		4.6% 28,236	4.6%
Human lines	23,331	-0.8%	23,331	-0.8%	23,195	-0.3%	23,132	-1.5%	22,738	-2.7%	####	-3.8%	####	-3.8%
o/w Human Calling	19,569	0.0%	19,569	0.0%	19,525	1.3%	19,621	0.3%	19,299	-1.9%	18,866	-3.6%	18,866	-3.6%
Non Human lines (M2M)	7,424	21.9%	7,424	21.9%	7,841	27.3%	8,496	31.3%	9,256	34.0%	9,370	26.2%	9,370	26.2%
Churn Rate %	6.4%	0.4pp	26.2%	3.4pp	6.5%	0.6pp	6.0%	-0.9pp	7.6%	0.6pp	6.2%	-0.3pp	26.3%	0.1pp
Total User Broadband (mln users)	13.2	7.9%	13.2	7.9%	13.3	9.2%	13.6	8.6%	13.4	3.1%	13.0	-1.2%	13.0	-1.2%
Total User LTE (mln users)	9.7	28.0%	9.7	28.0%	10.1	21.9%	10.4	16.2%	10.4	10.9%	10.3	6.1%	10.3	6.1%
Volumes of traffic (mln minutes)	21,210	17.6%	78,138	12.3%	21,168	16.4%	21,616	11.9%	20,541		5.7% 22,037		3.9% 85,363	9.2%
Outgoing traffic volumes	14,184	21.9%	51,359	14.3%	14,080	19.5%	14,468	14.6%	13,705	7.3%	14,793		4.3% 57,046	11.1%
Incoming traffic volumes	7,026	9.6%	26,779	8.7%	7,088	10.7%	7,148	7.0%	6,836	2.5%	7,245		3.1% 28,316	5.7%
Usage Voice (min/line/month)	303	18.6%	279	14.9%	304	17.2%	311	13.0%	299	8.1%	326	7.4%	310	11.2%
Usage Data (GB/users/month)	3.3	58.6%	2.9	51.3%	3.6	55.9%	4.1	51.5%	4.9	51.6%	5.5	67.1%	4.5	56.0%
ARPU (€ / line / month)
Human €	17.0	1.7%	16.1	3.9%	15.8	4.8%	16.0	0.8%	16.0	-2.0%	15.4	-9.3%	15.8	-1.6%
Reported €	13.0	-2.4%	12.5	0.8%	11.9	-0.7%	11.8	-5.4%	11.5	-9.3%	10.9	-16.0%	11.5	-8.0%
Calling €	14.8	-4.1%	14.4	-0.2%	13.5	-2.8%	13.4	-7.2%	12.9	-11.1%	12.3	-17.1%	13.0	-9.7%
	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18		FY18 IFRS 9/15
REVENUES (€ mln)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
TOTAL	1,424	-0.6%	5,275	1.9%	1,273	4.7%	1,322	1.6%	1,328	-0.4%	1,282	-10.0%	5,205	-1.3%	5,185
SERVICES	1,225	0.5%	4,655	1.6%	1,123	3.7%	1,142	-0.2%	1,169	-2.8%	1,079	(1) -11.9%	4,513	-3.1%	4,405
TRADITIONAL SERVICES	526	-2.1%	2,053	-8.8%	515	3.8%	516	0.8%	499	-3.9%	452	-14.1%	1,982	-3.5%	1,982
Outgoing voice	376	-0.9%	1,455	-8.0%	370	6.3%	374	3.9%	365	-1.4%	316	-15.9%	1,426	-2.0%	1,424
Incoming voice	80	11.8%	299	8.3%	79	11.6%	80	8.7%	76	1.7%	80	0.5%	315	5.5%	315
Messaging	71	-18.6%	299	-24.0%	65	-14.8%	62	-20.9%	57	-21.8%	56	-20.7%	241	-19.5%	242
INNOVATIVE SERVICES	625	8.3%	2,311	15.1%	551	3.2%	560	0.3%	567	-4.5%	551	-11.9%	2,228	-3.6%	2,121
Browsing	497	10.2%	1,815	15.1%	432	4.0%	441	1.0%	446	-4.3%	436	-12.2%	1,755	-3.3%	1,647
Internet Content	128	1.7%	496	14.8%	119	0.4%	119	-2.4%	121	-5.4%	115	-10.4%	474	-4.6%	474
Wholesale Services	74	-29.8%	291	-9.3%	57	7.9%	66	-11.2%	104	15.2%	76	2.4%	303	3.9%	302
HANDSETS	199	-6.4%	620	3.4%	150	12.6%	180	15.1%	159	20.7%	203	2.2%	692	11.6%	780

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

TIM - 4Q'18 Financial Operating Figures

Investor Relations 13

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 not 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)
Human €	Total service revenues net of visitors divided avg. number of human lines
Reported €	Total service revenues net of visitors divided avg. number of lines
Calling €	Total service revenues net of visitors divided avg. number of calling lines (human and not human)

Mobile REVENUES
-----------------

TOTAL	Total mobile revenues, including services and handsets
SERVICES	Mobile service revenues, including traditional, innovative and wholesale services
TRADITIONAL SERVICES	Traditional services include voice and messaging
Outgoing voice	Includes monthly fees, pay per use voice services, parametric attribution of bundled services and other roaming (voice)
Incoming voice	Revenues for voice traffic terminated on TIM mobile customers including visitors
Messaging	SMS retail and B2B including roaming
INNOVATIVE SERVICES	Innovative services include browsing, content revenues
Browsing	Pay per use data traffic and data bundles. Includes also parametric attribution of bundles with other services and data roaming
Internet Content	TIM Music, SMS premium services, partners content
Wholesale Services	Inwit revenues, colocation on mobile sites, visitors
HANDSETS	Mobile handsets sales

TIM Brasil Results - Reported Figures

Reais mln

	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18
KPI's - Mobile only		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Estimated Total Penetration (%)	113.5%		113.5%		113.8%		113.2%		112.6%		111.7%		111.7%
Market Share on total lines(%)	24.8%	-1.2pp	24.8%	-1.2pp	24.6%	-0.9pp	24.1%	-1.1pp	24.0%	-0.6pp	24.4%	-0.4pp	24.4%	-0.4pp
Total Lines ('000) (1)	58,634	-7.5%	58,634	-7.5%	57,894	-6.4%	56,554	-7.0%	56,241	-5.3%	55923	-4.6%	55923	-4.6%
TOTAL ARPU (2)	21.9	+14%	20.2	+12%	21.6	+14.0%	21.9	+13%	22.6	+10%	23.7	+8%	22.4	+11%
TOTAL MOU net of visitors	115	+2%	110	-6%	115	+8%	122	+15%	129	+16%	127	+11%	123.4	+12%
	4Q17		FY17		1Q18		2Q18		3Q18		4Q18		FY18
MAIN RESULTS (IAS/IFRS)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
REVENUES Reported	4,257	5.3%	16,234	4.0%	4,139	4.8%	4,171	5.8%	4,261	4.4%	4,479	5.2%	17,050	5.0%
of which services	4,075	6.1%	15,474	5.1%	3,983	6.4%	3,964	5.7%	4,033	3.3%	4,225	3.7%	16,205	4.7%
of which handsets	182	-9.5%	760	-15.3%	156	-24.6%	207	7.3%	228	28.1%	254	39.6%	845	11.2%
EBITDA Reported	1,758	13.6%	5,894	15.3%	1,456	16.8%	1,552	12.7%	1,644	8.7%	1,856	5.6%	6,508	10.4%
EBITDA margin	41.3%	3.0pp	36.3%	3.6pp	35.2%	3.6pp	37.2%	2.3pp	38.6%	1.6pp	41.4%	0.1pp	38.2%	1.9pp
EBITDA Organic	1,758	13.6%	5,894	14.0%	1,456	16.8%	1,552	12.7%	1,644	8.7%	1,853	5.4%	6,505	10.4%
EBITDA margin	41.3%	3.0pp	36.3%	3.2pp	35.2%	3.6pp	37.2%	2.3pp	38.6%	1.6pp	41.4%	0.1pp	38.2%	1.9pp
CAPEX Reported	1,661	-2.0%	4,148	-7.9%	646	-3.4%	1,018	25.8%	904	-10.4%	1,409	-15.2%	3,977	-4.1%
% on revenues	39.0%	-2.9pp	25.6%	-3.2pp	15.6%	-1.3pp	24.4%	3.9pp	21.2%	-3.5pp	31.5%	-7.5pp	23.3%	-2.3pp

	4Q17	FY17	1Q18	2Q18	3Q18	4Q18	FY18
Exchange rate AVG YTD (R\$ vs. euro)	3.60584	3.60584	3.99014	4.14011	4.29236	4.30628	4.30628

(1) Includes company lines (2) Gross of visitors

Reported & Organic Figures: YoY trends

€ mln

			4Q17		4Q18
	Reported Figures	Non Organic elements		Non		Reported	Non	Organic	Δ% yoy reported	Δ% yoy organic (*)
		Change in consolid. area	Exchange rate impact	recurring items	Organic figures (*)	Figures	recurring items	figures (*)
REVENUES
Domestic	4,042	-	2	-	4,044	3,874	(62)	3,936	-4.2%	-2.7%
Brasile	1,113	-	(133)	-	980	1,030	-	1,030	-7.5%	5.2%
Other Activities & Eliminations	(6)	-	-	-	(6)	(12)	-	(12)	-	-
TI Group	5,149	-	(131)	-	5,018	4,892	(62)	4,954	-5.0%	-1.3%
EBITDA
Domestic	1,116	-	1	(661)	1,778	1,263	(281)	1,544	13.2%	-13.2%
Brasile	465	-	(60)	-	405	427	1	426	-8.2%	5.4%
Other Activities & Eliminations	(4)	-	-	-	(4)	(7)	-	(7)	-	-
TI Group	1,577	-	(59)	(661)	2,179	1,683	(280)	1,963	6.7%	-9.9%
EBIT
Domestic	265	-	-	(661)	926	(216)	(871)	655	-	-29.3%
Brasile	195	-	(27)	-	168	188	1	187	-3.6%	11.1%
Other Activities & Eliminations	(3)	-	-	1	(4)	(7)	-	(7)	-	-
TI Group	457	-	(27)	(660)	1,090	(35)	(870)	835	-	-23.4%

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

Non linear items

Organic data € mln	FY'17	FY'18	D	D YoY	4Q17	4Q18	D	D YoY
Domestic EBITDA organic	7,050	6,629	(421)	-6.0%	1,778	1,544	(234)	-13.2%
Non-linear items	(216)	(21)	195		(71)	34	105
Liability reversal (one-off)	(112)		112		(45)		45
Vendor rebates	(104)	(21)	83		(26)		26
Accounting adjustments						34	34
Domestic EBITDA net of non-linear items	6,834	6,608	(226)	-3.3%	1,707	1,578	(129)	-7.6%
Group EBITDA organic Group EBITDA organic net of non-linear items	8,404 8,188	8,121 8,100	(283) (88)	-3.4% -1.1%	2,179 2,108	1,963 1,997	(216) (111)	-9.9% -5.3%