Telecom Italia Rsp

Quarterly Report • Nov 8, 2018

3Q'18 Financial and Operating Figures

TELECOM ITALIA INVESTOR RELATIONS investor\_relations@telecomitalia.it Website link: Telecom Italia Group Telecom Italia Investor Relations

Disclaimer

The financial and operating data have been extracted or derived, with the exception of some data, from the TIM Group Interim Management Report at 30 September 2018 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) and are unaudited.

The accounting policies and consolidation principles adopted in the preparation of the TIM Group Interim Management Report at 30 September 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 3Q18 and 9M18 financial results are defined as "3Q18 and 9M18 new principles" and, for comparison purposes, are also presented in accordance with the prior IFRS on revenues (IAS 18, IAS 11 and related Interpretations) and financial instruments (IAS 39) defined as "3Q18 and 9M18 old principle (comparable)".

Key financial data by Business Unit

€ mln

	3Q17	9M17	3Q18 Old principles (comparable)	3Q18 New principles	9M18 Old principles (comparable)	9M18 New principles
REVENUES
Domestic	3,818	11,312	3,793	3,759	11,311	11,182
Brasile Other activities & Elim.	1,096	3,389	922	917	2,929	2,918
TI Group	(7) 4,907	(22) 14,679	(10) 4,705	(10) 4,666	(23) 14,217	(23) 14,077
EBITDA Reported
Domestic	1,694	5,055	1,758	1,702	4,958	4,739
Brasile	408	1,170	357	346	1,084	1,050
Other activities & Elim. TI Group	(3) 2,099	(12) 6,213	(3) 2,112	(3) 2,045	(12) 6,030	(11) 5,778
EBITDA Margin Reported
Domestic	44.4%	44.7%	46.3%	45.3%	43.8%	42.4%
Brasile	37.2%	34.5%	38.7%	37.7%	37.0%	36.0%
TI Group	42.8%	42.3%	44.9%	43.8%	42.4%	41.0%
EBIT Reported
Domestic	822	2,507	(1,091)	(1,120)	393	251
Brazil Other activities & Elim.	146	340	127	126	381	378
TI Group	(5) 963	(13) 2,834	(2) (966)	(3) (997)	(12) 762	(12) 617
EBIT Margin Reported
Domestic	21.5%	22.2%	-	-	3.5%	2.2%
Brasile	13.3%	10.0%	13.8%	13.7%	13.0%	13.0%
TI Group	19.6%	19.3%	-	-	5.4%	4.4%
CAPEX
Domestic	1,551	3,177	702	675	1,975	1,887
Brasile Elim & Adj	274	704	196	188	598	573
TI Group	1,825	3,881	898	863	2,573	2,460
CAPEX ON SALES (%)
Domestic	40.6%	28.1%	18.5%	18.0%	17.5%	16.9%
Brasile	25.0%	20.8%	21.3%	20.5%	20.4%	19.6%
TI Group	37.2%	26.4%	19.1%	18.5%	18.1%	17.5%

Key BU financial data by Quarter UNAUDITED FIGURES

€ mln

	1Q17	2Q17	3Q17	4Q17	1Q18	2Q18 Old principles (comparable)	3Q18
REVENUES
Domestic	3,647	3,847	3,818	4,042	3,709	3,809	3,793
Brasile	1,181	1,112	1,096	1,113	1,037	970	922
Other activities & Elim.	(9)	(6)	(7)	(6)	(4)	(9)	(10)
TI Group	4,819	4,953	4,907	5,149	4,742	4,770	4,705
EBITDA Reported
Domestic	1,621	1,740	1,694	1,116	1,533	1,667	1,758
Brasile	372	390	408	465	365	362	357
Other activities & Elim.	(3)	(6)	(3)	(4)	(5)	(4)	(3)
TI Group	1,990	2,124	2,099	1,577	1,893	2,025	2,112
EBITDA Margin Reported
Domestic	44.4%	45.2%	44.4%	27.6%	41.3%	43.8%	46.3%
Brasile	31.5%	35.1%	37.2%	41.8%	35.2%	37.3%	38.7%
TI Group	41.3%	42.9%	42.8%	30.6%	39.9%	42.5%	44.9%
EBIT Reported
Domestic	787	898	822	265	678	806	(1,091)
Brasile	81	113	146	195	133	121	127
Other activities & Elim.	(3)	(5)	(5)	(3)	(5)	(5)	(2)
TI Group	865	1,006	963	457	806	922	(966)
EBIT Margin Reported
Domestic	21.6%	23.3%	21.5%	6.6%	18.3%	21.2%	-
Brasile	6.9%	10.2%	13.3%	17.5%	12.8%	12.5%	13.8%
TI Group	17.9%	20.3%	19.6%	8.9%	17.0%	19.3%	-
CAPEX
Domestic	631	995	1,551	1,374	533	740	702
Brasile	200	230	274	446	162	240	196
Elim & Adj					(1)	1
TI Group	831	1,225	1,825	1,820	694	981	898
CAPEX ON SALES (%)
Domestic	17.3%	25.9%	40.6%	34.0%	14.4%	19.4%	18.5%
Brasile	16.9%	20.7%	25.0%	40.1%	15.6%	24.7%	21.3%
TI Group TIM - 3Q'18 Financial Operating Figures	17.2%	24.7%	37.2%	35.3%	14.6%	20.6%	19.1%

Investor Relations 4

P&L Group UNAUDITED FIGURES

€ mln

			3Q18	9M18	3Q18	9M18
	3Q17	9M17	Old principles (comparable)		New principles
REVENUES	4,907	14,679	4,705	14,217	4,666	14,077
Other Income	99	316	56	200	56	200
TOTAL OPERATING REVENUES AND OTHER INCOME	5,006	14,995	4,761	14,417	4,722	14,277
Acquisition of goods and services	(2,045)	(6,181)	(1,893)	(5,815)	(1,909)	(5,889)
Employee benefits expenses	(673)	(2,203)	(642)	(2,151)	(645)	(2,171)
Other operating expenses	(357)	(933)	(236)	(888)	(245)	(906)
Internally generated assests and Others	168	535	122	467	122	467
EBITDA	2,099	6,213	2,112	6,030	2,045	5,778
EBITDA Margin	42.8%	42.3%	44.9%	42.4%	43.8%	41.0%
Depreciation and amortization	(1,109)	(3,358)	(3,081)	(5,274)	(3,045)	(5,167)
Gains (losses) on disposals of non-current assets	3	9	3	6	3	6
Impairment reversals (losses) on non-current assets	(30)	(30)	-	-	-	-
EBIT	963	2,834	(966)	762	(997)	617
EBIT Margin	19.6%	19.3%	-	5.4%	-	4.4%
Income (loss) equity invest. valued equity method	1	(19)		8		8
Net Financial Income / (Expenses)	(386)	(1,126)	(326)	(1,041)	(329)	(1,047)
Profit (loss) before tax from continuing operations	578	1,689	(1,292)	(271)	(1,326)	(422)
Income tax expense	(102)	(559)	22	(306)	43	(254)
Profit (loss) from continuing operations	476	1,130	(1,270)	(577)	(1,283)	(676)
Profit (loss) from Discontinued operations/Non-current assets held for sale	-	-	-	-	-	-
Profit (loss) for the year	476	1,130	(1,270)	(577)	(1,283)	(676)
Attributable to:
Owners of the Parent	437	1,033	(1,388)	(770)	(1,400)	(868)
Non-controlling interests	39	97	118	193	117	192

UNAUDITED FIGURES Consolidated Balance Sheet

€ mln FY17 9M18 old principles (comparable) 9M18 new principles ASSETS NON-CURRENT ASSETS Intangible assets Goodwill 29,462 27,322 27,322 Intangible assets with a finite useful life 7,192 6,401 6,289 36,654 33,723 33,611 Tangible assets Property, plant and equipment owned 14,216 13,708 13,708 Assets held under finance leases 2,331 2,075 2,075 16,547 15,783 15,783 Other non-current assets Investments in associates and joint ventures accounted for using the equity method 17 15 15 Other investments 51 52 52 Non-current financial assets 1,768 1,290 1,290 Miscellaneous receivables and other non-current assets 2,422 2,469 2,212 Deferred tax assets 993 1,010 1,075 5,251 4,836 4,644 TOTAL NON-CURRENT ASSETS (A) 58,452 54,342 54,038 CURRENT ASSETS Inventories 290 311 311 Trade and miscellaneous receivables and other current assets 4,959 5,248 5,085 Current income tax receivables 77 64 64 Other investments Securities other than investments, financial receivables and other current financial assets 1,430 1,530 1,530 Cash and cash equivalents 3,575 2,543 2,543 TOTAL CURRENT ASSETS (B) 10,331 9,696 9,533 TOTAL ASSETS (A+B) 68,783 64,038 63,571

Consolidated Balance Sheet

€ mln	FY17	9M18 old principles (comparable)	9M18 new principles
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity holders of the Parent	21,557	19,935	19,782
Equity attributable to Minority Interests	2,226	2,124	2,119
TOTAL EQUITY (C)	23,783	22,059	21,901
NON-CURRENT LIABILITIES
Non-current financial liabilities	28,108	25,030	25,030
Employee benefits	1,736	1,698	1,698
Deferred tax liabilities	265	278	241
Provisions	825	828	828
Miscellaneous payables and other non-current liabilities	1,678	1,503	1,265
TOTAL NON-CURRENT LIABILITIES (D)	32,612	29,337	29,062
CURRENT LIABILITIES
Current financial liabilities	4,756	6,460	6,460
Trade and miscellaneous payables and other current liabilities	7,520	6,137	6,105
Current income tax payables	112	45	43
Current liabilities sub-total (E)	12,388	12,642	12,608
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	12,642	12,608
TOTAL LIABILITIES (F=D+E)	45,000	41,979	41,670
TOTAL EQUITY AND LIABILITIES (C+F)	68,783	64,038	63,571

UNAUDITED FIGURES

Net Cash Flow & Net Debt Dynamics

€ mln	9M17	9M18 Old principles (comparable)	9M18 New principles
EBITDA CAPEX	6,213 (3,881)	6,030 (2,573)	5,778 (2,460)
Change in net operating working capital:	(1,427)	(1,916)	(1,778)
Change in inventories	(64)	(20)	(20)
Change in trade receivables and net amounts due from customers on construction contracts	9	(331)	(266)
Change in trade payables (*)	(998)	(1,242)	(1,242)
Capital grants received		9	9
Other changes in operating receivables/payables	(374)	(332)	(259)
Change in provisions for employee benefits	(34)	(116)	(116)
Change in operating provisions and Other changes	127	32	33
Net operating Free Cash Flow	998	1,457	1,457
Sale of investments and other disposals flow	26	14	14
Share capital increases/reimbursements, including incidental costs	16	22	22
Financial investments flow	(1)	(3)	(3)
Dividends payment	(219)	(239)	(239)
Change in finance lease contracts	(45)	(48)	(48)
Finance expenses, income taxes and other net non-operating requirements flow	(1,884)	(1,085)	(1,085)
Reduction/(Increase) in adjusted net financial debt from continuing operations	(1,109)	118	118
Reduction/(Increase) in net financial debt from Discontinued operations/Non-current assets held for sale	-	-	-
Reduction/(Increase) in adjusted net financial debt	(1,109)	118	118
OPENING NET FINANCIAL DEBT (Adjusted)	25,119	25,308	25,308
Net cash flow	(1,109)	118	118
ENDING NET FINANCIAL DEBT (Adjusted)	26,228	25,190	25,190
Adj for fair value valuation of derivatives and related underlyings	730	937	937
ENDING NET FINANCIAL DEBT (Reported)	26,958	26,127	26,127

(*) Includes the change in trade payables for amounts due to fixed asset suppliers

TIM - 3Q'18 Financial Operating Figures Investor Relations 8

UNAUDITED FIGURES

Domestic Business Results - Reported Figures UNAUDITED FIGURES

€ mln

	1Q17		2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
REVENUES	3,647	2.8%	3,847	4.0%	3,818	0.8%	4,042	1.8%	15,354	2.3%	3,709	1.7%	3,809	-1.0%	3,793	-0.7%
Services	3,342	-0.3%	3,500	0.9%	3,552	0.7%	3,607	2.1%	14,000	0.9%	3,399	1.7%	3,480	-0.6%	3,518	-0.9%
Equipments	305	55.8%	347	50.6%	266	1.2%	435	-0.7%	1,354	20.0%	310	1.6%	329	-5.3%	275	3.0%
Domestic Mobile Services	1,083	2.2%	1,145	2.5%	1,202	1.6%	1,225	0.5%	4,655	1.6%	1,123	3.7%	1,142	-0.2%	1,169	-2.8%
Traditional	496	-13.4%	512	-11.6%	519	-7.5%	526	-2.1%	2,053	-8.8%	515	3.8%	516	0.8%	499	-3.9%
Innovative	534	21.8%	558	19.8%	594	12.7%	625	8.3%	2,311	15.1%	551	3.2%	560	0.3%	567	-4.5%
Wholesale	53	10.4%	74	3.4%	90	-6.1%	74	-29.8%	291	-9.3%	57	7.9%	66	-11.2%	104	15.2%
Domestic Wireline Services	2,424	-2.4%	2,508	0.8%	2,496	-0.1%	2,524	1.2%	9,952	-0.1%	2,419	-0.2%	2,485	-0.9%	2,492	-0.2%
Traditional Services	967	-9.1%	974	-7.6%	950	-7.9%	937	-12.4%	3,828	-9.3%	906	-6.3%	902	-7.3%	862	-9.3%
Innovative Services	652	10.5%	708	16.0%	713	14.2%	753	16.1%	2,825	14.3%	750	15.0%	784	10.7%	820	15.1%
Domestic Wholesale	505	-5.9%	498	-1.5%	497	-1.1%	494	1.2%	1,994	-1.9%	491	-2.9%	489	-1.8%	512	2.8%
TIS Group	310	-0.3%	336	-0.6%	349	-1.4%	354	1.7%	1,349	-0.1%	286	-7.7%	323	-3.9%	310	-11.2%
Subs. Adj. and Other	-11 45.1%			-7 62.5%	-14	-1.5%		-13 78.0%		-44 60.0%		-14 -31.5%		-13 -81.8%		-12 13.2%
Elimination & Other	-164		-154		-147		-143		-607		-143		-147		-142
EBITDA	1,621	11.0%	1,740	1.0%	1,694	-6.5%	1,116	-34.5%	6,171	-7.9%	1,533	-5.4%	1,667	-4.2%	1,758	3.8%
EBITDA Margin	44.4%		45.2%		44.4%		27.6%		40.2%		41.3%		43.8%		46.3%
CAPEX	631	-18.9%	995	24.8%	1,551	88.5%	1,374	4.8%	4,551	22.7%	533	-15.5%	740	-25.6%	702	-54.7%
% on revenues	17.3%		25.9%		40.6%		34.0%		29.6%		14.4%		19.4%		18.5%

* Includes 630 mln € GSM Licences in 3Q'17

Domestic Wireline Results - Reported Figures UNAUDITED FIGURES

	1Q17		2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
KPIs ('000)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Physical accesses	11,230	-3.2%	11,185	-2.5%	11,137	-2.0%	11,044	-2.1%	11,044	-2.1%	10,845	-3.4%	10,644	-4.8%	10,450	-6.2%
o/w NGN	1,217	82.3%	1,507	92.2%	1,754	102.9%	2,150	117.8%	2,150	117.8%	2,458	102.0%	2,744	82.1%	2,955	68.5%
Physical accesses (Voip included)	11,462	-3.1%	11,429	-2.3%	11,431	-1.4%	11,407	-1.0%	11,407	-1.0%	11,285	-1.5%	11,203	-2.0%	11,102	-2.9%
OLO Access (on TI infrastructure)	7,810	3.5%	7,881	3.6%	7,892	3.8%	7,951	3.6%	7,951	3.6%	8,065	3.3%	8,078	2.5%	8,114	2.8%
ULL (1)	5,657	0.4%	5,620	-1.1%	5,554	-1.8%	5,418	-4.0%	5,418	-4.0%	5,228	-7.6%	4,999	-11.0%	4,777	-14.0%
Virtual ULL	17	-40.2%	16	-41.7%	15	-35.0%	14	-32.5%	14	-32.5%	13	-23.4%	12	-23.1%	11	-24.8%
Wholesale Line Rental	373	-20.6%	347	-21.8%	330	-20.6%	304	-21.7%	304	-21.7%	291	-22.1%	274	-20.9%	257	-22.0%
Naked	1,282	3.3%	1,267	0.9%	1,230	-2.0%	1,228	-3.6%	1,228	-3.6%	1,228	-4.2%	1,194	-5.7%	1,165	-5.3%
NGN	481	182.9%	632	217.3%	763	208.4%	986	179.2%	986	179.2%	1,306	171.7%	1,598	153.0%	1,904	149.6%
TI Retail Active Broadband	7,195	3.4%	7,278	4.1%	7,425	5.6%	7,510	6.1%	7,510	6.1%	7,527	4.6%	7,547	3.7%	7,561	1.8%
Business	1,443	0.0%	1,446	0.4%	1,443	0.3%	1,441	0.3%	1,441	0.3%	1,426	-1.1%	1,415	-2.1%	1,392	-3.5%
Consumer	5,752	4.3%	5,832	5.0%	5,982	7.0%	6,068	7.6%	6,068	7.6%	6,101	6.1%	6,132	5.1%	6,169	3.1%
BB Accesses Wholesale (2)	2,125	12.6%	2,268	19.2%	2,314	20.6%	2,513	24.7%	2,513	24.7%	2,810	32.2%	3,052	34.6%	3,316	43.3%
ARPU Broadband (€/month)	23.0	7.3%	24.9	13.8%	24.5	9.5%	24.9	11.4%	24.3	10.5%	25.5	10.9%	26.1	4.8%	27.4	11.8%
ARPU Consumer (€/month)	31.9	0.1%	33.8	5.9%	33.4	3.6%	33.6	5.1%	33.2	3.7%	32.8	2.7%	33.9	0.4%	35.5	6.4%

	1Q17		2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
REVENUES(€ mln)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
TOTAL	2,596	1.7%	2,700	4.7%	2,630	-0.5%	2,763	1.5%	10,689	1.8%	2,579	-0.7%	2,635	-2.4%	2,607	-0.9%
Services	2,424	-2.4%	2,508	0.8%	2,496	-0.1%	2,524	1.2%	9,952	-0.1%	2,419	-0.2%	2,485	-0.9%	2,492	-0.2%
Equipments	172	145.8%	192	114.0%	134	-6.7%	239	5.4%	737	39.0%	160	-6.9%	150	-21.9%	115	-13.9%
TRADITIONAL SERVICES	967	-9.1%	974	-7.6%	950	-7.9%	937	-12.4%	3,828	-9.3%	906	-6.3%	902	-7.3%	862	-9.3%
Voice	801	-11.1%	812	-7.1%	786	-6.1%	763	-8.1%	3,162	-8.1%	754	-5.9%	718	-11.6%	690	-12.1%
Business Data & Others trad	166	1.5%	161	-10.0%	165	-15.7%	174	-27.4%	666	-14.4%	152	-8.2%	185	14.4%	171	4.0%
INNOVATIVE SERVICES	652	10.5%	708	16.0%	713	14.2%	753	16.1%	2,825	14.3%	750	15.0%	784	10.7%	820	15.1%
Broadband and Content	497	10.3%	546	18.5%	552	16.2%	564	18.4%	2,160	15.9%	582	17.1%	596	9.0%	628	13.8%
ICT Service	155	11.3%	161	8.3%	161	7.8%	188	9.6%	665	9.2%	168	8.1%	188	16.5%	191	18.9%
Domestic Wholesale	505	-5.9%	498	-1.5%	497	-1.1%	494	1.2%	1,994	-1.9%	491	-2.9%	489	-1.8%	512	2.8%
TIS Group	310	-0.3%	336	-0.6%	349	-1.4%	354	1.7%	1,349	-0.1%	286	-7.7%	323	-3.9%	310	-11.2%
Subs. Adj. and Other	-11	45.1%	-7	62.5%	-14	-1.5%	-13	78.0%	-44	60.0%	-14	-31.5%	-13	-81.8%	-12	13.2%

(1) SULL, NGA included (2) On TI infrastructure

Domestic Mobile Results - Reported Figures UNAUDITED FIGURES

	1Q17		2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
KPIs		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Total number of lines ('000)	29,417	-1.4%	29,952	0.7%	30,285	2.5%	30,755	3.8%	30,755	3.8%	31,036	5.5%	31,629	5.6%	31,994	5.6%
o/w Calling	25,435	-1.1%	26,036	1.7%	26,588	4.0%	26,992	5.2%	26,992	5.2%	27,366	7.6%	28,117	8.0%	28,556	7.4%
Human lines	23,257	-3.5%	23,479	-1.9%	23,378	-1.0%	23,331	-0.8%	23,331	-0.8%	23,195	-0.3%	23,132	-1.5%	22,738	-2.7%
o/w Human Calling	19,275	-3.5%	19,563	-1.2%	19,681	0.2%	19,569	0.0%	19,569	0.0%	19,525	1.3%	19,621	0.3%	19,299	-1.9%
Non Human lines (M2M)	6,160	7.4%	6,473	11.4%	6,907	16.6%	7,424	21.9%	7,424	21.9%	7,841	27.3%	8,496	31.3%	9,256	34.0%
Churn Rate %	5.9%	0.2pp	6.9%	1.6pp	7.0%	1.1pp	6.4%	0.4pp	26.2%	3.4pp	6.5%	0.6pp	6.0%	-0.9pp	7.6%	0.6pp
Total User Broadband (mln of users)	12.2	4.7%	12.5	6.2%	13.0	7.3%	13.2	7.9%	13.2	7.9%	13.3	9.2%	13.6	8.6%	13.4	3.1%
Total User LTE (mln of users)	8.3	67.0%	9.0	56.2%	9.4	52.7%	9.7	28.0%	9.7	28.0%	10.1	21.9%	10.4	16.2%	10.4	10.9%
Volumes of traffic (mln of minutes) (1)	18,183	7.3%	19,310	11.1%	19,434	12.9%	21,210	17.6%	78,138	12.3%	21,168	16.4%	21,616	11.9%	20,541	5.7%
Outgoing traffic volumes	11,781	7.1%	12,627	13.1%	12,767	14.6%	14,184	21.9%	51,359	14.3%	14,080	19.5%	14,468	14.6%	13,705	7.3%
Incoming traffic volumes	6,402	7.7%	6,683	7.5%	6,667	9.8%	7,026	9.6%	26,779	8.7%	7,088	10.7%	7,148	7.0%	6,836	2.5%
Usage Voice (min/line/month)(3)	259	11.4%	276	14.2%	276	14.7%	303	18.6%	279	14.9%	304	17.2%	311	13.0%	299	8.1%
Usage Data (GB/users/month)	2.3	35.3%	2.7	43.3%	3.2	63.3%	3.3	58.6%	2.9	51.3%	3.6	55.9%	4.1	51.5%	4.9	51.6%
ARPU (€ / line / month)
Human €(3)	15.1	5.6%	15.8	5.5%	16.4	2.8%	17.0	1.7%	16.1	3.9%	15.8	4.8%	16.0	0.8%	16.0	-2.0%
Reported €(2)	12.0	3.2%	12.5	3.2%	12.7	-0.4%	13.0	-2.4%	12.5	0.8%	11.9	-0.7%	11.8	-5.4%	11.8	-7.1%
Calling €(4)	13.9	3.0%	14.4	2.2%	14.5	-1.7%	14.8	-4.1%	14.4	-0.2%	13.5	-2.8%	13.4	-7.2%	13.4	-8.1%
		1Q17 2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
REVENUES (€ mln)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy

REVENUES (€ mln)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
TOTAL	1,216	2.5%	1,301	3.2%	1,334	2.6%	1,424	-0.6%	5,275	1.9%	1,273	4.7%	1,322	1.6%	1,328	-0.4%
SERVICES	1,083	2.2%	1,145	2.5%	1,202	1.6%	1,225	0.5%	4,655	1.6%	1,123	3.7%	1,142	-0.2%	1,169	-2.8%
Traditional Services	496	-13.4%	512	-11.6%	519	-7.5%	526	-2.1%	2,053	-8.8%	515	3.8%	516	0.8%	499	-3.9%
Outgoing voice (5)	349	-13.7%	360	-10.7%	371	-6.2%	376	-0.9%	1,455	-8.0%	370	6.3%	374	3.9%	365	-1.4%
Incoming voice	71	5.4%	74	5.5%	75	10.1%	80	11.8%	299	8.3%	79	11.6%	80	8.7%	76	1.7%
Messaging	76	-24.9%	79	-26.4%	73	-25.1%	71	-18.6%	299	-24.0%	65	-14.8%	62	-20.9%	57	-21.8%
Innovative Services	534	21.8%	558	19.8%	594	12.7%	625	8.3%	2,311	15.1%	551	3.2%	560	0.3%	567	-4.5%
Browsing	415	16.8%	437	15.6%	466	18.9%	497	10.2%	1,815	15.1%	432	4.0%	441	1.0%	446	-4.3%
Internet Content	119	43.1%	122	37.8%	128	-5.3%	128	1.7%	496	14.8%	119	0.4%	119	-2.4%	121	-5.4%
Wholesale Services	53	10.4%	74	3.4%	90	-6.1%	74	-29.8%	291	-9.3%	57	7.9%	66	-11.2%	104	15.2%
HANDSETS	133	5.2%	156	8.6%	132	13.1%	199	-6.4%	620	3.4%	150	12.6%	180	15.1%	159	20.7%

(1) Incoming + Outgoing volumes (Visitors and Roamers volumes not included) (2) Net of visitors on Human lines (3) Net of visitors on Total lines (including M2M) (4) Net of visitors on calling lines (5) Outgoing voice revenues include roaming revenues

TIM Brasil Results - Reported Figures

Reais mln

	1Q17		2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
KPI's - Mobile only		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
Estimated Total Penetration (%)	117.2%		116.7%		115.9%		113.5%		113.5%		113.8%		113.2%		112.6%
Market Share on total lines(%)	25.5%	-0.6pp	25.1%	-0.1pp	24.6%	-0.6pp	24.8%	-1.2pp	24.8%	-1.2pp	24.6%	-0.9pp	24.1%	-1.1pp	24.0%	-0.6pp
Total Lines ('000) (1)	61,868	-8.0%	60,831	-4.9%	59,390	-6.1%	58,634	-7.5%	58,634	-7.5%	57,894	-6.4%	56,554	-7.0%	56,241	-5.3%
TOTAL ARPU (2)	19.0	+10.5%	19.4	+13%	20.5	+11%	21.9	+14%	20.2	+12%	21.6	+14.0%	21.9	+13%	22.6	+10%
TOTAL MOU net of visitors	107	-10.1%	107	-9.7%	111	-4.6%	115	+2%	110	-6%	115	+8%	122	+15%	129	+16%
	1Q17		2Q17		3Q17		4Q17		FY17		1Q18		2Q18		3Q18
MAIN RESULTS (IAS/IFRS)		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy		D % yoy
REVENUES Reported	3,951	2.5%	3,943	3.2%	4,083	4.7%	4,257	5.3%	16,234	4.0%	4,139	4.8%	4,171	5.8%	4,261	4.4%
of which services	3,744	3.5%	3,750	5.0%	3,905	5.9%	4,075	6.1%	15,474	5.1%	3,983	6.4%	3,964	5.7%	4,033	3.3%
of which handsets	207	-12.3%	193	-22.8%	178	-15.2%	182	-9.5%	760	-15.3%	156	-24.6%	207	7.3%	228	28.1%
EBITDA Reported	1,247	12.6%	1,377	15.8%	1,512	19.1%	1,758	13.6%	5,894	15.3%	1,456	16.8%	1,552	12.7%	1,644	8.7%
EBITDA margin	31.6%	2.9 pp	34.9%	3,8 pp	37.0%	4.4pp	41.3%	3.0pp	36.3%	3.6pp	35.2%	3.6pp	37.2%	2.3pp	38.6%	1.6pp
EBITDA Organic	1,247	9.4%	1,377	15.7%	1,512	17.0%	1,758	13.6%	5,894	14.0%	1,456	16.8%	1,552	12.7%	1,644	8.7%
EBITDA margin	31.6%	2.0pp	34.9%	3,7 pp	37.0%	3.9pp	41.3%	3.0pp	36.3%	3.2pp	35.2%	3.6pp	37.2%	2.3pp	38.6%	1.6pp
CAPEX Reported	669	-5.8%	809	-17.0%	1,009	-10.1%	1,661	-2.0%	4,148	-7.9%	646	-3.4%	1,018	25.8%	904	-10.4%
% on revenues	16.9%	-1,5pp	20.5%	-5 pp	24.7%	-4.1pp	39.0%	-2.9pp	25.6%	-3.2pp	15.6%	-1.3pp	24.4%	3.9pp	21.2%	-3.5pp

	1Q17	2Q17	3Q17	4Q17	FY17	1Q18	2Q18	3Q18
Exchange rate AVG YTD (R\$ vs. euro)	3.34707	3.44195	3.53378	3.60584	3.60584	3.99014	4.14011	4.29236

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

Reported & Organic Figures (*): YoY trends

											UNAUDITED FIGURES
		3Q17					3Q18			Δ% yoy reported	Δ% yoy organic *
Reported Figures (a)			Non Organic elements (b)	Non recurring items (c)	Organic figures * (d=a+b+c)	Reported figures (e)		Non recurring items (f)	Organic figures * (g=e+f)	(h=e/a-1)	(i=g/d-1)
€ mln		Change in consolid. area	Exchange rate impact
REVENUES						REVENUES
Domestic	3,818	-	2	-	3,820	Domestic	3,793	-	3,793	-0.7%	-0.7%
Brasile	1,096	-	(213)	-	883	Brasile	922	-	922	-15.9%	4.4%
Other Activities & Eliminations	(7)	-	-	-	(7)	Other Activities & Eliminations	(10)	-	(10)
TI Group	4,907	-	(211)	-	4,696	TI Group	4,705	-	4,705	-4.1%	0.2%
EBITDA						EBITDA
Domestic	1,694	-	1	(126)	1,821	Domestic	1,758	(6)	1,764	3.8%	-3.1%
Brasile	408	-	(78)	-	330	Brasile	357	-	357	-12.5%	8.7%
Other Activities & Eliminations	(3)	-	-	(1)	(2)	Other Activities & Eliminations	(3)	(1)	(2)
TI Group	2,099	-	(77)	(127)	2,149	TI Group	2,112	(7)	2,119	0.6%	-1.4%
EBITDA Margin						EBITDA Margin
Domestic	44.4%				47.7%	Domestic	46.3%		46.5%	2.0pp	-1.2pp
Brasile	37.2%				37.0%	Brasile	38.7%		38.6%	1.5pp	1.6pp
TI Group	42.8%				45.8%	TI Group	44.9%		45.0%	2.1pp	-0.7pp
EBIT						EBIT
Domestic	822	-	1	(156)	979	Domestic	(1,091)	(2,006)	915	-	-6.5%
Brasile	146	-	(28)	-	118	Brasile	127	-	127	-13.0%	9.9%
Other Activities & Eliminations	(5)	-	-	(1)	(4)	Other Activities & Eliminations	(2)	(1)	(1)
TI Group	963	-	(27)	(157)	1,093	TI Group	(966)	(2,007)	1,041	-	-4.8%
EBIT Margin						EBIT Margin
Domestic	21.5%				25.6%	Domestic	-		24.1%	-	-1.5pp
Brasile	13.3%				13.1%	Brasile	13.8%		13.8%	0.5pp	0.7pp
TI Group	19.6%				23.3%	TI Group	-		22.1%	-	-1.1pp

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