Telecom Italia Rsp

Quarterly Report • Mar 7, 2018

4Q'17 Financial and operating data

Index

Disclaimer Key Financial Data by BU FY Key Financial Data by BU Quarter P&L Group FY Balance Sheet Net Debt & Cash Flow Domestic Business Results Domestic Wireline Results TIM Brasil Results Website link: TI Group Reported & Organic Data Telecom Italia Group Domestic Reported & Organic Data Telecom Italia Investor Relations

TELECOM ITALIA INVESTOR RELATIONS

Domestic Mobile Results investor\_relations@telecomitalia.it

Disclaimer

The financial and operating data have been extracted or derived, with the exception of some data, from the TIM 2016 and 2017 Annual Reports; the latter report was examined and approved by the TIM Board of Directors on 6 March 2018; the data of the 2017 FY were prepared (including those of the prior year/periods under comparison) in accordance with the International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the European Union (designated as "IFRS").

In particular, the accounting policies and consolidation principles adopted in the preparation of the Financial Statements at 31 December 2017 have been applied on a basis consistent with those adopted in the Annual Financial Statements at 31 December 2016, to which reference should be made, except for the use of the new standards and interpretations adopted by the TIM Group starting from the consolidated financial statements at 31 December 2017 which had no effects on the 2017 Financial Statements.

As of today, the audit work by our independent auditors on the TIM Consolidated and Separate Financial Statements for the year ended 31 December 2017 have not yet been completed.

Segment information is consistent with the prior periods under comparison.

Furthermore, the Sofora - Telecom Argentina group, which was disposed of on 8 March 2016, is classified as Discontinued operations.

Back

Key financial data by Business Unit

UNAUDITED FIGURES

REVENUES	1Q16	1H16	9M16	FY16	1Q17	1H17	9M17	FY17
Domestic	3.548	7.247	11.036	15.006	3.647	7.494	11.312	15.354
o/w Wireline Domestic	2.553	5.131	7.774	10.495	2.596	5.296	7.926	10.689
o/w Mobile Domestic	1.186	2.447	3.747	5.179	1.216	2.517	3.851	5.275
Brasile	897	1.858	2.922	4.047	1.181	2.293	3.389	4.502
Other activities & Elim.	(5)	(9)	(19)	(28)	(9)	(15)	(22)	(28)
TI Group	4.440	9.096	13.939	19.025	4.819	9.772	14.679	19.828
EBITDA Reported
Domestic	1.461	3.184	4.995	6.698	1.621	3.361	5.055	6.171
Brasile	258	556	900	1.325	372	762	1.170	1.635
Other activities & Elim.	(7)	(14)	(17)	(21)	(3)	(9)	(12)	(16)
TI Group	1.712	3.726	5.878	8.002	1.990	4.114	6.213	7.790
EBITDA Margin Reported
Domestic	41,2%	43,9%	45,3%	44,6%	44,4%	44,8%	44,7%	40,2%
Brasile	28,8%	29,9%	30,8%	32,7%	31,5%	33,2%	34,5%	36,3%
TI Group	38,6%	41,0%	42,2%	42,1%	41,3%	42,1%	42,3%	39,3%
EBIT Reported
Domestic	662	1.581	2.575	3.376	787	1.685	2.507	2.772
Brazil	49	121	210	368	81	194	340	535
Other activities & Elim.	(7)	(15)	(17)	(22)	(3)	(8)	(13)	(16)
TI Group	704	1.687	2.768	3.722	865	1.871	2.834	3.291
EBIT Margin Reported
Domestic	18,7%	21,8%	23,3%	22,5%	21,6%	22,5%	22,2%	18,1%
Brasile	5,5%	6,5%	7,2%	9,1%	6,9%	8,5%	10,0%	11,9%
TI Group	15,9%	18,5%	19,9%	19,6%	17,9%	19,1%	19,3%	16,6%
CAPEX
Domestic	778	1.575	2.398	3.709	631	1.626	3.177	4.551
Brasile	166	408	709	1.167	200	430	704	1.150
Elim & Adj	0	0	0	0	0
TI Group	944	1.983	3.107	4.876	831	2.056	3.881	5.701
CAPEX ON SALES (%)
Domestic	21,9%	21,7%	21,7%	24,7%	17,3%	21,7%	28,1%	29,6%
Brasile	18,5%	22,0%	24,3%	28,8%	16,9%	18,8%	20,8%	25,5%
TI Group	21,3%	21,8%	22,3%	25,6%	17,2%	21,0%	26,4%	28,8%

€ mln								UNAUDITED FIGURES
REVENUES	1Q16	2Q16	3Q16	4Q16	1Q17	2Q17	3Q17	4Q17
Domestic	3.548	3.699	3.789	3.970	3.647	3.847	3.818	4.042
o/w Wireline Domestic	2.553	2.578	2.643	2.721	2.596	2.700	2.630	2.763
o/w Mobile Domestic	1.186	1.261	1.300	1.432	1.216	1.301	1.334	1.424
Brasile	897	961	1.064	1.125	1.181	1.112	1.096	1.113
Other activities & Elim.	(5)	(4)	(10)	(9)	(9)	(6)	(7)	(6)
TI Group	4.440	4.656	4.843	5.086	4.819	4.953	4.907	5.149
EBITDA Reported
Domestic	1.461	1.723	1.811	1.703	1.621	1.740	1.694	1.116
Brasile	258	298	344	425	372	390	408	465
Other activities & Elim.	(7)	(7)	(3)	(4)	(3)	(6)	(3)	(4)
TI Group	1.712	2.014	2.152	2.124	1.990	2.124	2.099	1.577
EBITDA Margin Reported
Domestic	41,2%	46,6%	47,8%	42,9%	44,4%	45,2%	44,4%	27,6%
Brasile	28,8%	31,0%	32,3%	37,8%	31,5%	35,1%	37,2%	41,8%
TI Group	38,6%	43,3%	44,4%	41,8%	41,3%	42,9%	42,8%	30,6%
EBIT Reported
Domestic	662	919	994	801	787	898	822	265
Brasile	49	72	89	158	81	113	146	195
Other activities & Elim.	(7)	(8)	(2)	(5)	(3)	(5)	(5)	(3)
TI Group	704	983	1.081	954	865	1.006	963	457
EBIT Margin Reported
Domestic	18,7%	24,8%	26,2%	20,2%	21,6%	23,3%	21,5%	6,6%
Brasile	5,5%	7,5%	8,4%	14,0%	6,9%	10,2%	13,3%	17,5%
TI Group	15,9%	21,1%	22,3%	18,8%	17,9%	20,3%	19,6%	8,9%
CAPEX
Domestic	778	797	823	1.311	631	995	1.551	1.374
Brasile	166	242	301	458	200	230	274	446
Elim & Adj	0	0	0	0		0	0	0
TI Group	944	1.039	1.124	1.769	831	1.225	1.825	1.820
CAPEX ON SALES (%)
Domestic	21,9%	21,5%	21,7%	33,0%	17,3%	25,9%	40,6%	34,0%
Brasile	18,5%	25,2%	28,3%	40,7%	16,9%	20,7%	25,0%	40,1%
TI Group	21,3%	22,3%	23,2%	34,8%	17,2%	24,7%	37,2%	35,3%

Key financial data by Business Unit

Back

P&L Group

UNAUDITED FIGURES

€ mln	1Q16	1H16	9M16	FY16	1Q17	1H17	9M17	FY17
REVENUES	4.440	9.096	13.939	19.025	4.819	9.772	14.679	19.828
Other Income	47	107	165	311	78	217	316	523
TOTAL OPERATING REVENUES AND OTHER INCOME	4.487	9.203	14.104	19.336	4.897	9.989	14.995	20.351
Acquisition of goods and services	(1.923)	(3.783)	(5.710)	(7.793)	(2.061)	(4.136)	(6.181)	(8.388)
Employee benefits expenses	(848)	(1.551)	(2.303)	(3.106)	(760)	(1.530)	(2.203)	(3.626)
Other operating expenses	(247)	(501)	(757)	(1.083)	(273)	(576)	(933)	(1.208)
Internally generated assests and Others	243	358	544	648	187	367	535	661
EBITDA	1.712	3.726	5.878	8.002	1.990	4.114	6.213	7.790
EBITDA Margin	38,6%	41,0%	42,2%	42,1%	41,3%	42,1%	42,3%	39,3%
Depreciation and amortization	(1.009)	(2.047)	(3.116)	(4.291)	(1.129)	(2.249)	(3.358)	(4.473)
Gains (losses) on disposals of non-current assets	3	13	14	14	4	6	9	11
Impairment reversals (losses) on non-current assets	(2)	(5)	(8)	(3)		-	(30)	(37)
EBIT	704	1.687	2.768	3.722	865	1.871	2.834	3.291
EBIT Margin	15,9%	18,5%	19,9%	19,6%	17,9%	19,1%	19,3%	16,6%
Income (loss) equity invest. valued equity method		5	4	(16)		(20)	(19)	(19)
Net Financial Income / (Expenses)	(26)	(145)	(510)	(907)	(384)	(740)	(1.126)	(1.495)
Profit (loss) before tax from continuing operations	678	1.547	2.262	2.799	481	1.111	1.689	1.777
Income tax expense	(221)	(489)	(699)	(880)	(256)	(457)	(559)	(490)
Profit (loss) from continuing operations	457	1.058	1.563	1.919	225	654	1.130	1.287
Profit (loss) from Discontinued operations/Non-current assets held for sale	47	47	47	47
Profit (loss) for the year	504	1.105	1.610	1.966	225	654	1.130	1.287
Attributable to:
Owners of the Parent	433	1.018	1.495	1.808	200	596	1.033	1.121
Non-controlling interests	71	87	115	158	25	58	97	166

Back

Back Consolidated Balance Sheet		UNAUDITED FIGURES
€ mln	FY16	FY17
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill	29.612	29.462
Intangible assets with a finite useful life	6.951	7.192
	36.563	36.654
Tangible assets
Property, plant and equipment owned	13.947	14.209
Assets held under finance leases	2.413	2.331
	16.360	16.540
Other non-current assets
Investments in associates and joint ventures accounted for using the equity method	18	17
Other investments	46	51
Non-current financial assets	2.698	1.768
Miscellaneous receivables and other non-current assets	2.222	2.422
Deferred tax assets	877	993
	5.861	5.251
TOTAL NON-CURRENT ASSETS (A)	58.784	58.445
CURRENT ASSETS
Inventories	270	290
Trade and miscellaneous receivables and other current assets	5.426	4.959
Current income tax receivables	94	77
Other investments
Securities other than investments, financial receivables and other current financial assets	1.908	1.430
Cash and cash equivalents	3.964	3.575
Current assets sub-total	11.662	10.331
Discontinued operations/assets held for sale
of a financial nature	-	-
of a non-financial nature	-	-
	-	-
TOTAL CURRENT ASSETS (B)	11.662	10.331
TOTAL ASSETS (A+B)	70.446	68.776

Consolidated Balance Sheet		UNAUDITED FIGURES
€ mln	FY16	FY17
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity holders of the Parent	21.207	21.557
Equity attributable to Minority Interests	2.346	2.226
TOTAL EQUITY (C)	23.553	23.783
NON-CURRENT LIABILITIES
Non-current financial liabilities	30.469	28.108
Employee benefits	1.355	1.736
Deferred tax liabilities	293	265
Provisions	830	825
Miscellaneous payables and other non-current liabilities	1.607	1.678
TOTAL NON-CURRENT LIABILITIES (D)	34.554	32.612
CURRENT LIABILITIES
Current financial liabilities	4.056	4.756
Trade and miscellaneous payables and other current liabilities	7.646	7.513
Current income tax payables	637	112
Current liabilities sub-total (E)	12.339	12.381
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)	12.339	12.381
TOTAL LIABILITIES (F=D+E)	46.893	44.993
TOTAL EQUITY AND LIABILITIES (C+F)	70.446	68.776

Net Cash Flow & Net Debt Dynamics

Back

UNAUDITED FIGURES

	1Q16	1H16	9M16	FY16	1Q17	1H17	9M17	FY17
(€ mln)
EBITDA	1.712	3.726	5.878	8.002	1.990	4.114	6.213	7.790
CAPEX	(944)	(1.983)	(3.107)	(4.876)	(831)	(2.056)	(3.881)	(5.701)
Change in net operating working capital:	(750)	(1.078)	(830)	(98)	(795)	(1.130)	(1.427)	(126)
Change in inventories	(87)	(40)	(71)	(10)	(29)	(44)	(64)	(30)
Change in trade receivables and net amounts due from customers on construction contracts	30	(130)	(31)	(310)	31	(52)	9	379
Change in trade payables (*)	(566)	(635)	(425)	445	(697)	(692)	(998)	(217)
Other changes in operating receivables/payables	(127)	(273)	(303)	(223)	(100)	(342)	(374)	(258)
Change in provisions for employee benefits	59	40	12	(131)	(7)	(7)	(34)	437
Change in operating provisions and Other changes	(52)	(34)	(45)	(41)	4	37	127	96
Net operating Free Cash Flow	25	671	1.908	2.856	361	958	998	2.496
Sale of investments and other disposals flow	707	732	737	745	2	9	26	33
Share capital increases/reimbursements, including incidental costs				1.304		6	16	16
Financial investments flow	(9)	(9)	(11)	(15)	(1)	(1)	(1)	(12)
Dividends payment		(227)	(227)	(227)		(218)	(219)	(235)
Change in finance lease contracts	(46)	(123)	(178)	(232)	(15)	(30)	(45)	(68)
Finance expenses, income taxes and other net non-operating requirements flow	(500)	(1.242)	(1.648)	(2.234)	(463)	(709)	(1.884)	(2.419)
Reduction/(Increase) in adjusted net financial debt from continuing operations	177	(198)	581	2.197	(116)	15	(1.109)	(189)
Reduction/(Increase) in net financial debt from Discontinued operations/Non-current assets held for sale	(38)	(38)	(38)	(38)	-
Reduction/(Increase) in adjusted net financial debt	139	(236)	543	2.159	(116)	15	(1.109)	(189)
OPENING NET FINANCIAL DEBT (Adjusted)	27.278	27.278	27.278	27.278	25.119	25.119	25.119	25.119
Net cash flow	139	(236)	543	2.159	(116)	15	(1.109)	(189)
ENDING NET FINANCIAL DEBT (Adjusted)	27.139	27.514	26.735	25.119	25.235	25.104	26.228	25.308
Adj for fair value valuation of derivatives and related underlyings	1.094	556	676	836	688	624	730	783
ENDING NET FINANCIAL DEBT (Reported)	28.233	28.070	27.411	25.955	25.923	25.728	26.958	26.091

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

																		UNAUDITED FIGURES
	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy	1Q17	Δ% yoy	2Q17	Δ% yoy	3Q17	Δ% yoy	4Q17	Δ% yoy	FY17	Δ% yoy
KPIs ('000)
Wireline
Physical accesses	11.602	-5,5%	11.468	-5,1%	11.368	-4,5%	11.285	-3,9%	11.285	-3,9%	11.230	-3,2%	11.185	-2,5%	11.137	-2,0%	11.044	-2,1%	11.044	-2,1%
Broadband (retail+wholesale)	8.955	1,9%	8.992	1,9%	9.042	2,3%	9.206	3,6%	9.206	3,6%	9.435	5,4%	9.687	7,7%	9.872	9,2%	10.154	10,3%	10.154	10,3%
Mobile
Total lines (1)	29.846	-1,0%	29.742	-1,1%	29.549	-1,6%	29.617	-1,3%	29.617	-1,3%	29.417	-1,4%	29.952	0,7%	30.285	2,5%	30.755	3,8%	30.755	3,8%
€ mln	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy	1Q17	Δ% yoy	2Q17	Δ% yoy	3Q17	Δ% yoy	4Q17	Δ% yoy	FY17	Δ% yoy
REVENUES	3.548	-2,3%	3.699	-1,2%	3.789	1,0%	3.970	2,5%	15.006	0,0%	3.647	2,8%	3.847	4,0%	3.818	0,8%	4.042	1,8%	15.354	2,3%
Services	3.352	-2,4%	3.468	-1,1%	3.526	-0,4%	3.532	-1,3%	13.878	-1,3%	3.342	-0,3%	3.500	0,9%	3.552	0,7%	3.607	2,1%	14.000	0,9%
Equipments	196	0,1%	231	-3,4%	263	23,9%	438	48,1%	1.128	19,6%	305	55,8%	347	50,6%	266	1,2%	435	-0,7%	1.354	20,0%
Domestic Mobile Services	1.059	0,6%	1.117	0,7%	1.183	1,1%	1.220	3,0%	4.579	1,4%	1.083	2,2%	1.145	2,5%	1.202	1,6%	1.225	0,5%	4.655	1,6%
Traditional	573	-7,7%	580	-6,9%	561	-12,2%	537	-13,5%	2.250	-10,1%	496	-13,4%	512	-11,6%	519	-7,5%	526	-2,1%	2.053	-8,8%
Innovative	438	16,8%	466	12,0%	527	16,4%	577	19,2%	2.008	16,2%	534	21,8%	558	19,8%	594	12,7%	625	8,3%	2.311	15,1%
Wholesale	48	-15,8%	72	1,1%	96	20,7%	105	34,9%	321	12,4%	53	10,4%	74	3,4%	90	-6,1%	74	-29,8%	291	-9,3%
Domestic Wireline Services	2.483	-4,3%	2.488	-4,8%	2.499	-3,6%	2.494	-3,0%	9.965	-3,9%	2.424	-2,4%	2.508	0,8%	2.496	-0,1%	2.524	1,2%	9.952	-0,1%
Traditional Services	1.064	-10,8%	1.053	-11,1%	1.032	-10,3%	1.069	-3,6%	4.219	-9,0%	967	-9,1%	974	-7,6%	950	-7,9%	937	-12,4%	3.828	-9,3%
Innovative Services	590	5,8%	610	4,6%	624	8,1%	648	8,7%	2.472	6,8%	652	10,5%	708	16,0%	713	14,2%	753	16,1%	2.825	14,3%
Domestic Wholesale	537	-4,1%	506	-7,8%	503	-8,6%	488	-10,7%	2.034	-7,8%	505	-5,9%	498	-1,5%	497	-1,1%	494	1,2%	1.994	-1,9%
TIS Group	311	0,3%	338	4,0%	354	5,4%	348	1,5%	1.351	2,8%	310	-0,3%	336	-0,6%	349	-1,4%	354	1,7%	1.349	-0,1%
Subs. Adj. and Other	-19	24,7%	-19	32,4%	-13	41,4%	-59	-155,0%	-110	-11,3%	-11	45,1%	-7	62,5%	-14	-1,5%	-13	78,0%	-44	60,0%
Elimination & Other	-190	10,9%	-137	37,1%	-157	29,5%	-182	-2,9%	-667	19,8%	-164	13,5%	-154	-11,8%	-147	6,6%	-143	21,8%	-607	8,9%
EBITDA	1.461	-9,3%	1.723	39,4%	1.811	7,9%	1.703	63,4%	6.698	20,3%	1.621	11,0%	1.740	1,0%	1.694	-6,5%	1.116	-34,5%	6.171	-7,9%
EBITDA Margin	41,2%		46,6%		47,8%		42,9%		44,6%		44,4%		45,2%		44,4%		27,6%		40,2%
Capex	778	15,1%	797	-4,0%	823	4,0%	1.311	-18,2%	3.709	-4,9%	631	-18,9%	995	24,8%	1.551	88,5%	1.374	4,8%	4.551	22,7%
% on revenues	21,9%		21,5%		21,7%		33,0%		24,7%		17,3%		25,9%		40,6%		34,0%		29,6%
Headcount at period-end ('000)	52.713	-0,5%	52.622	-0,4%	52.140	-1,1%	51.280	-2,6%	51.280	-2,6%	51.163	-2,7%	51.095	-2,9%	50.488	-3,2%	49.851	-2,8%	49.851	-2,8%

Back						Domestic Wireline Results - Reported Figures
																		UNAUDITED FIGURES
	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy		4Q16 Δ% yoy	FY16	Δ% yoy		1Q17 Δ% yoy		2Q17 Δ% yoy		3Q17 Δ% yoy		4Q17 Δ% yoy		FY17 Δ% yoy
KPIs
Physical accesses ('000)	11.602	-5,5%	11.468	-5,1%	11.368	-4,5%	11.285	-3,9%	11.285	-3,9%	11.230	-3,2%	11.185	-2,5%	11.137	-2,0%	11.044	-2,1%	11.044	-2,1%
o/w NGN	668	131,5%	784	110,7%	864	100,0%	987	84,6%	987	84,6%	1.217	82,3%	1.507	92,2%	1.754	102,9%	2.150	117,8%	2.150	117,8%
OLO Access (on TI infrastructure)	7.543	3,4%	7.606	3,1%	7.600	2,8%	7.677	2,8%	7.677	2,8%	7.810	3,5%	7.881	3,6%	7.892	3,8%	7.951	3,6%	7.951	3,6%
ULL	5.632	3,2%	5.680	3,1%	5.658	2,5%	5.641	1,2%	5.641	1,2%	5.657	0,4%	5.620	-1,1%	5.554	-1,8%	5.418	-4,0%	5.418	-4,0%
Virtual ULL	29	12,2%	28	2,7%	23	-19,4%	21	-25,8%	21	-25,8%	17	-40,2%	16	-41,7%	15	-35,0%	14	-32,5%	14	-32,5%
Wholesale Line Rental	470	-16,9%	443	-19,1%	416	-20,6%	388	-21,9%	388	-21,9%	373	-20,6%	347	-21,8%	330	-20,6%	304	-21,7%	304	-21,7%
Naked	1.241	2,9%	1.256	3,5%	1.256	3,1%	1.274	3,6%	1.274	3,6%	1.282	3,3%	1.267	0,9%	1.230	-2,0%	1.228	-3,6%	1.228	-3,6%
NGN	170	-	199	-	247	-	353	-	353	-	481	-	632	-	763	-	986	179,2%	986	179,2%
TI Retail Broadband Accesses ('000)	7.067	1,8%	7.088	1,7%	7.123	2,0%	7.191	2,4%	7.191	2,4%	7.310	3,4%	7.419	4,7%	7.559	6,1%	7.641	6,3%	7.641	6,3%
Business	1.480	-4,2%	1.472	-3,3%	1.470	-2,3%	1.464	-1,6%	1.464	-1,6%	1.470	-0,7%	1.477	0,4%	1.471	0,1%	1.472	0,6%	1.472	0,6%
Consumer	5.588	3,5%	5.616	3,1%	5.653	3,2%	5.727	3,5%	5.727	3,5%	5.840	4,5%	5.942	5,8%	6.087	7,7%	6.169	7,7%	6.169	7,7%
BroadBand Accesses Wholesale (on TI infrastructure) ('000)	1.888	2,6%	1.903	2,9%	1.918	3,4%	2.016	8,0%	2.016	8,0%	2.125	12,6%	2.268	19,2%	2.314	20,6%	2.513	24,7%	2.513	24,7%
BB Arpu (euro/mese)	21,5	5,2%	21,9	4,4%	22,4	8,1%	22,3	5,5%	22,0	5,8%	23,0	7,3%	24,9	13,8%	24,5	9,5%	24,9	11,4%	24,3	10,5%
REVENUES(€ mln)	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy		4Q16 Δ% yoy	FY16	Δ% yoy		1Q17 Δ% yoy		2Q17 Δ% yoy		3Q17 Δ% yoy		4Q17 Δ% yoy		FY17 Δ% yoy
TOTAL	2.553	-3,9%	2.578	-4,1%	2.643	-0,1%	2.721	2,1%	10.495	-1,5%	2.596	1,7%	2.700	4,7%	2.630	-0,5%	2.763	1,5%	10.689	1,8%
Services	2.483	-4,3%	2.488	-4,8%	2.499	-3,6%	2.494	-3,0%	9.965	-3,9%	2.424	-2,4%	2.508	0,8%	2.496	-0,1%	2.524	1,2%	9.952	-0,1%
Equipments	70	13,8%	90	20,7%	144	169,0%	227	145,2%	530	88,2%	172	145,8%	192	114,0%	134	-6,7%	239	5,4%	737	39,0%
TRADITIONAL SERVICES	1.064	-10,8%	1.053	-11,1%	1.032	-10,3%	1.069	-3,6%	4.219	-9,0%	967	-9,1%	974	-7,6%	950	-7,9%	937	-12,4%	3.828	-9,3%
Voice	901	-13,2%	874	-13,9%	836	-14,4%	830	-12,0%	3.441	-13,4%	801	-11,1%	812	-7,1%	786	-6,1%	763	-8,1%	3.162	-8,1%
Business Data & Others trad	163	5,3%	179	5,7%	195	12,9%	239	44,6%	777	17,2%	166	1,5%	161	-10,0%	165	-15,7%	174	-27,4%	666	-14,4%
INNOVATIVE SERVICES	590	5,8%	610	4,6%	624	8,1%	648	8,7%	2.472	6,8%	652	10,5%	708	16,0%	713	14,2%	753	16,1%	2.825	14,3%
Broadband	447	6,9%	457	6,2%	471	10,2%	473	8,2%	1.847	7,9%	493	10,4%	539	17,8%	542	15,1%	558	18,0%	2.131	15,4%
Content	4	-17,6%	4	-21,3%	4	-23,1%	4	-10,3%	17	-18,5%	4	0,9%	8	96,5%	10	137,6%	7	70,5%	29	75,9%
ICT Service	139	3,2%	149	0,6%	149	3,0%	172	10,9%	609	4,5%	155	11,3%	161	8,3%	161	7,8%	188	9,6%	665	9,2%
Domestic Wholesale	537	-4,1%	506	-7,8%	503	-8,6%	488	-10,7%	2.034	-7,8%	505	-5,9%	498	-1,5%	497	-1,1%	494	1,2%	1.994	-1,9%
TIS Group	311	0,3%	338	4,0%	354	5,4%	348	1,5%	1.351	2,8%	310	-0,3%	336	-0,6%	349	-1,4%	354	1,7%	1.349	-0,1%
Subs. Adj. and Other	-19	24,7%	-19	32,4%	-13	41,4%	-59	-155%	-110	-11,3%	-11	45,1%	-7	62,5%	-14	-1,5%	-13	78,0%	-44	60,0%

Back						Domestic Mobile Results - Reported Figures
€ mln																		UNAUDITED FIGURES
		1Q16 Δ% yoy		2Q16 Δ% yoy		3Q16 Δ% yoy		4Q16 Δ% yoy	FY16	Δ% yoy		1Q17 Δ% yoy		2Q17 Δ% yoy		3Q17 Δ% yoy		4Q17 Δ% yoy		FY17 Δ% yoy
KPI's
Total number of lines ('000) (1)	29.846	-1,0%	29.742	-1,1%	29.549	-1,6%	29.617	-1,3%	29.617	-1,3%	29.417	-1,4%	29.952	0,7%	30.285	2,5%	30.755	3,8%	30.755	3,8%
Churn Rate %	5,6%	-0,8pp	5,3%	-0,2pp	5,9%	0,1pp	6,0%	0,2pp	22,8%	-0,7pp	5,9%	0,2pp	6,9%	1,6pp	7,0%	1,1pp	6,4%	0,4pp	26,2%	3,4pp
Total User Broadband (mln of users)	11,6	11,1%	11,8	9,5%	12,1	7,7%	12,2	6,0%	12,2	6,0%	12,2	4,7%	12,5	6,2%	13,0	7,3%	13,2	7,9%	13,2	7,9%
o/w Total User LTE (mln of users)	5,0	-	5,7	-	6,2	-	7,6	-	7,6	-	8,3	67,0%	9,0	56,2%	9,4	52,7%	9,7	28,0%	9,7	28,0%
Volumes of traffic (mln of minutes) (2)	16.943	4,9%	17.381	4,5%	17.213	5,3%	18.042	6,1%	69.578	5,2%	18.183	7,3%	19.310	11,1%	19.434	12,9%	21.210	17,6%	78.138	12,3%
o/w Outgoing traffic volumes (mln of minutes)	10.999	1,6%	11.164	1,6%	11.143	4,0%	11.633	4,8%	44.939	3,0%	11.781	7,1%	12.627	13,1%	12.767	14,6%	14.184	21,9%	51.359	14,3%
o/w Incoming traffic volumes (mln of minutes)	5.945	11,4%	6.217	10,1%	6.069	7,9%	6.408	8,6%	24.640	9,5%	6.402	7,7%	6.683	7,5%	6.667	9,8%	7.026	9,6%	26.779	8,7%
Usage Voice (min/line/month)(3)	233	8,8%	241	8,2%	241	9,5%	256	10,2%	243	9,2%	259	11,4%	276	14,2%	276	14,7%	303	18,6%	279	14,9%
Usage Data (GB/users/month)	1,7	28,6%	1,9	36,0%	2,0	24,7%	2,1	30,8%	1,9	29,7%	2,3	35,3%	2,7	43,3%	3,2	63,3%	3,3	58,6%	2,9	51,3%
ARPU(3) €	11,6	2,5%	12,1	1,5%	12,8	2,4%	13,3	4,1%	12,4	2,6%	12,0	3,2%	12,5	3,2%	12,7	-0,4%	13,0	-2,4%	12,5	0,8%
REVENUES (€ mln), Reported figures		1Q16 Δ% yoy		2Q16 Δ% yoy		3Q16 Δ% yoy		4Q16 Δ% yoy	FY16	Δ% yoy		1Q17 Δ% yoy		2Q17 Δ% yoy		3Q17 Δ% yoy		4Q17 Δ% yoy		FY17 Δ% yoy
TOTAL	1.186	3,0%	1.261	2,0%	1.300	-0,2%	1.432	3,9%	5.179	2,2%	1.216	2,5%	1.301	3,2%	1.334	2,6%	1.424	-0,6%	5.275	1,9%
SERVICES	1.059	0,6%	1.117	0,7%	1.183	1,1%	1.220	3,0%	4.579	1,4%	1.083	2,2%	1.145	2,5%	1.202	1,6%	1.225	0,5%	4.655	1,6%
Traditional Services	573	-7,7%	580	-6,9%	561	-12,2%	537	-13,5%	2.250	-10,1%	496	-13,4%	512	-11,6%	519	-7,5%	526	-2,1%	2.053	-8,8%
o/w Outgoing voice (4)	404	-12,8%	403	-11,4%	395	-14,3%	379	-12,3%	1.581	-12,7%	349	-13,7%	360	-10,7%	371	-6,2%	376	-0,9%	1.455	-8,0%
o/w Incoming voice	67	15,7%	70	13,4%	68	4,4%	71	3,2%	276	8,9%	71	5,4%	74	5,5%	75	10,1%	80	11,8%	299	8,3%
o/w Messaging	102	2,0%	107	0,7%	98	-13,3%	87	-27,7%	394	-10,4%	76	-24,9%	79	-26,4%	73	-25,1%	71	-18,6%	299	-24,0%
Innovative Services	438	16,8%	466	12,0%	527	16,4%	577	19,2%	2.008	16,2%	534	21,8%	558	19,8%	594	12,7%	625	8,3%	2.311	15,1%
o/w Browsing	356	16,3%	377	11,4%	392	5,4%	451	15,0%	1.576	11,9%	415	16,8%	437	15,6%	466	18,9%	497	10,2%	1.815	15,1%
o/w Internet Content	83	19,4%	88	14,3%	135	67,6%	126	37,1%	432	35,4%	119	43,1%	122	37,8%	128	-5,3%	128	1,7%	496	14,8%
Wholesale Services	48	-15,8%	72	1,1%	96	20,7%	105	34,9%	321	12,4%	53	10,4%	74	3,4%	90	-6,1%	74	-29,8%	291	-9,3%
Handsets	127	29,5%	144	13,7%	117	-12,0%	212	9,2%	600	8,8%	133	5,2%	156	8,6%	132	13,1%	199	-6,4%	620	3,4%

(1) M2M included

(2) Incoming + Outgoing volumes (Visitors and Roamers volumes not included)

(3) Net of visitors

(4) Outgoing voice revenues include roaming revenues

Back TIM Brasil Results -		Reported Figures
Reais mln																	UNAUDITED FIGURES
	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy	1Q17	Δ% yoy	2Q17	Δ% yoy	3Q17	Δ% yoy	4Q17	Δ% yoy	FY17	Δ% yoy
KPI's - Mobile only
Estimated Total Penetration (%)	125,4%		123,0%		121,6%		118,0%				117,2%		116,7%		115,9%		113,5%		113,5%
Market Share on total lines(%)	26,1%	-0,6pp	25,3%	-1,2pp	25,2%	-1,1pp	26,0%	+0,3pp	26,0%	+0,3pp	25,5%	-0,6pp	25,2%		24,6%	-0,6pp	24,8%	-1,2pp	24,8%	-1,2pp
Total Lines ('000) (1)	67.269	-11,2%	63.988	-14,2%	63.247	-12,9%	63.418	-4,3%	63.418	-4,3%	61.868	-8,0%	60.831	-4,9%	59.390	-6,1%	58.634	-7,5%	58.634	-7,5%
TOTAL ARPU (2)	17,2	3%	17,2	7%	18,4	12%	19,2	9%	18,0	8%	19,0	+10,5%	19,4	+13%	20,5	+11%	21,9	+14%	20,2	+12%
TOTAL MOU net of visitors	119	-1,4%	118	-0,4%	116	-2,1%	113	-5,8%	117	-2,4%	107	-10,1%	107	-9,7%	111	-4,6%	115	+2%	110	-6%
MAIN RESULTS (IAS/IFRS, R\$ mln)	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy	1Q17	Δ% yoy	2Q17	Δ% yoy	3Q17	Δ% yoy	4Q17	Δ% yoy	FY17	Δ% yoy
REVENUES Reported	3.854	-15,3%	3.820	-12,4%	3.900	-5,2%	4.043	-1,7%	15.617	-8,9%	3.951	2,5%	3.943	3,2%	4.083	4,7%	4.257	5,3%	16.234	4,0%
of which services	3.618	-8,3%	3.570	-5,9%	3.690	-2,4%	3.842	-0,7%	14.720	-4,3%	3.744	3,5%	3.750	5,0%	3.905	5,9%	4.075	6,1%	15.474	5,1%
of which handsets	236	-61,1%	250	-56,1%	210	-36,9%	201	-18,3%	897	-48,9%	207	-12,3%	193	-22,8%	178	-15,2%	182	-9,5%	760	-15,3%
EBITDA Reported	1.107	-17,4%	1.189	-6,8%	1.270	-1,2%	1.548	5,8%	5.114	-4,7%	1.247	12,6%	1.377	15,8%	1.512	19,1%	1.758	13,6%	5.894	15,3%
EBITDA margin	28,7%	-0,8pp	31,1%	1,8pp	32,6%	1,4pp	38,3%	2,7pp	32,7%	1,4pp	31,6%	2,9 pp	34,9%	3,8 pp	37,0%	4,4pp	41,3%	3,0pp	36,3%	3,6pp
EBITDA Organic (net non recurring)	1.140	-15,0%	1.190	-6,7%	1.292	0,5%	1.548	2,1%	5.170	-4,6%	1.247	9,4%	1.377	15,7%	1.512	17,0%	1.758	13,6%	5.894	14,0%
EBITDA margin	29,6%	0,1 pp	31,2%	1,9 pp	33,1%	1,9 pp	38,3%	1,5 pp	33,1%	1,5 pp	31,6%	2,0pp	34,9%	3,7 pp	37,0%	3,9pp	41,3%	3,0pp	36,3%	3,2pp
Capex Reported	710	-23,2%	975	-17,7%	1.122	-3,9%	1.695	+13,9%	4.502	-5,5%	669	-5,8%	809	-17,0%	1.009	-10,1%	1.661	-2,0%	4.148	-7,9%
% on revenues	18,4%	-1,9pp	25,5%	-1,6pp	28,8%	0,4pp	41,9%	5,7pp	28,8%	1,0pp	16,9%	-1,5pp	20,5%	-5 pp	24,7%	-4,1pp	39,0%	-2,9pp	25,6%	-3,2pp
	1Q16	Δ% yoy	1H16	Δ% yoy	9M16	Δ% yoy	FY16	Δ% yoy	FY16		1Q17	Δ% yoy	1H17	Δ% yoy	9M17	Δ% yoy	FY17	Δ% yoy	FY17
Exchange rate AVG YTD (R\$ vs. euro)	4,29753		4,13001		3,96106		3,85935		3,85935		3,34707		3,44195		3,53378		3,60584		3,60584

(1) Includes company lines

(2) Gross of visitors

Revised						Reported & Organic Figures (*): YoY trends				UNAUDITED FIGURES
		4Q16					4Q17			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 Domestic	3.970		(8)		3.962	REVENUES Domestic	4.042		4.042	1,8	2,0
Brasile	1.125		(69)		1.056	Brasile	1.113		1.113	(1,1)	5,3
Other Activities & Eliminations	(9)				(9)	Other Activities & Eliminations	(6)		(6,0)	33,3	33,3
TI Group	5.086		(77)		5.009	TI Group	5.149		5.149	1,2	2,8
EBITDA						EBITDA
Domestic	1.703		(2)	43	1.744	Domestic	1.116	661	1.777	(34,5)	1,9
Brasile	425		(16)	0	409	Brasile	465	0	465	9,4	13,6
Other Activities & Eliminations	(4)				(4)	Other Activities & Eliminations	(4)		(4)
TI Group	2.124		(18)	43	2.149	TI Group	1.577	661	2.238	(25,8)	4,1
EBITDA Margin						EBITDA Margin
Domestic	42,9%				44,0%	Domestic	27,6%		44,0%	-15,3 pp	0 pp
Brasile	37,8%				38,3%	Brasile	41,8%		41,3%	4 pp	3 pp
TI Group	41,8%				42,9%	TI Group	30,6%		43,5%	-11,2 pp	0,6 pp
EBIT						EBIT
Domestic	801		(1)	43	843	Domestic	265	661	926	(66,9)	9,8
Brasile	158			(2)	156	Brasile	195	0	195	23,4	24,4
Other Activities & Eliminations	(5)				(5)	Other Activities & Eliminations	(3)	0	(3)
TI Group	954		(1)	41	994	TI Group	457	661	1.118	(52,1)	12,5
EBIT Margin						EBIT Margin
Domestic	20,2%				21,3%	Domestic	6,6%		22,9%	-13,6 pp	1,6 pp
Brasile	14,0%				14,3%	Brasile	17,5%		17,1%	3,5 pp	2,8 pp
TI Group	18,8%				19,8%	TI Group	8,9%		21,7%	-9,9 pp	1,9 pp
Non recurring items on EBITDA				4Q16	4Q17	Non recurring items on EBIT			4Q16	4Q17
Labour cost				30	678	Labour Costs			30	678
Other Costs & Charges				13	(17)	Other Costs & Charges			11	(17)
Total (*) Organic: excluding exchange rate fluctuations & non-recurring items				43	661	Total			41	661

Domestic Reported and Organic Ebitda € mln
													UNAUDITED FIGURES				UNAUDITED FIGURES
		1Q17 1Q16		Δ yoy		2Q17 2Q16		Δ yoy		3Q17 3Q16		Δ yoy		4Q17 4Q16		Δ yoy	FY17	FY16	Δ yoy
			abs	%			abs	%			abs	%			abs	%			abs	%
Reported EBITDA		1.621 1.461		160 +11,0%		1.740 1.723	17	+1,0%		1.694 1.811	(117)	-6,5%		1.116 1.703	(587)	-34,5%	6.171	6.698	(527)	-7,9%
Exchange Rate Impact Labour Costs Other Operating Expenses Other Charges Non recurring Items	5 19 24	1 65 2 68	(1) (60) 17 (44)		0 5 64 2 71	1 2 14 0 17	(1) 3 50 2 54		9 116 1 126	(2) 47 9 54	2 (38) 107 1 72		0 678 (23) 6 661	(2) 30 11 2 41	2 648 (34) 4 620		697 176 9 882	(2) 144 36 2 180	2 553 140 7 702
Organic EBITDA		1.645 1.529	116	+7,6%		1.811 1.740	71	+4,1%		1.820 1.865	(45)	-2,4%		1.777 1.744	33	1,9%	7.053	6.878	175	+2,5%

Domestic Organic Like for Like Ebitda € mln
													UNAUDITED FIGURES				UNAUDITED FIGURES
		1Q17 1Q16		Δ yoy		2Q17 2Q16		Δ yoy		3Q17 3Q16		Δ yoy		4Q17 4Q16		Δ yoy	FY17	FY16		Δ yoy
			abs	%			abs	%			abs	%			abs	%			abs	%
Organic EBITDA		1.645 1.529	116	+7,6%		1.811 1.740	71	+4,1%		1.820 1.865	(45)	-2,4%		1.777 1.744	33	1,9%	7.053	6.878	175	+2,5%
EU Roaming Like at Home Shift from modem rent to sale Wholesale IRU Transaction Purchasing incentive recognized as opex reduction / Income 2015 annual bonus provision Last technical support payment relating to the Argentina sale Provision for migration risk (Ethernet vs ATM)	(39) 0 (19)		0 (39) 0 (19) 0 0		0 (41) 0 (50) 0 0	0 0 0 (42) (66) 0	0 (41) 0 (8) 66 0		36 (32) 0 (9) 0 0	0 (6) (86) (5) 0 (27)	36 (25) 86 (4) 27		13 (49) (26)	0 (54) (63) 26	13 4 37 (26)		49 (161) (104)	(60) (86) (110) (66) (27) 26	49 (101) 86 6 66 27 (26)
Non linear Items	(58)	0	(58)		(91)	(108)	17		(5)	(124)	120		(62)	(91)	28		(216)	(324)	107

Organic Like for Like EBITDA 1.587 1.529 58 +3,8% 1.720 1.632 88 +5,4% 1.815 1.741 75 4,3% 1.715 1.653 61 3,7% 6.837 6.554 282 +4,3%