Telecom Italia Rsp

Quarterly Report • Nov 10, 2017

3Q'17 Financial and operating data

Index

Disclaimer Key Financial Data by BU FY Key Financial Data by BU Quarter P&L Group FY Net Debt & Cash Flow Balance Sheet Domestic Business Results Domestic Wireline Results Domestic Mobile Results investor\_relations@telecomitalia.it 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

Disclaimer

The financial and operating data have been extracted or derived, with the exception of some data, from the Condensed Consolidated Financial Statements at 30 September 2017, which have 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 Condensed Consolidated Financial Statements at 30 September 2017 have not been audited.

The accounting policies adopted in the preparation of the Condensed Consolidated Financial Statements at 30 September 2017 are the same as those adopted in the TIM Group consolidated financial statements at 31 December 2016, to which reference can be made.

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

We hereby point out that in this document some Organic «Like for Like» items have been recalculated having a solely management purpose to allow for a better understanding of the current business trend and single out non-linear and/or non-repetitive outcomes either currently and/or in the timeframe hereby taken into account. Such information must not be considered as a replacement of any financial information they may refer to and interpret, are not subject to any auditing, and are included for explanation purposes only.

Key financial data by Business Unit

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

Key financial data by Business Unit

^€ mln UNAUDITED FIGURES

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

P&L Group

UNAUDITED FIGURES

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

Consolidated Balance Sheet		UNAUDITED FIGURES
€ mln	FY16	9M17
ASSETS
NON-CURRENT ASSETS
Intangible assets
Goodwill	29.612	29.520
Intangible assets with a finite useful life	6.951	7.123
	36.563	36.643
Tangible assets
Property, plant and equipment owned	13.947	13.897
Assets held under finance leases	2.413	2.369
	16.360	16.266
Other non-current assets
Investments in associates and joint ventures accounted for using the equity method	18	17
Other investments	46	49
Non-current financial assets	2.698	1.916
Miscellaneous receivables and other non-current assets	2.222	2.418
Deferred tax assets	877	705
	5.861	5.105
TOTAL NON-CURRENT ASSETS (A)	58.784	58.014
CURRENT ASSETS
Inventories	270	333
Trade and miscellaneous receivables and other current assets	5.426	5.472
Current income tax receivables	94	52
Other investments
Securities other than investments, financial receivables and other current financial assets	1.908	1.506
Cash and cash equivalents	3.964	2.519
Current assets sub-total	11.662	9.882
Discontinued operations/assets held for sale
of a financial nature	-	-
of a non-financial nature	-	-
	-	-
TOTAL CURRENT ASSETS (B)	11.662	9.882

Consolidated Balance Sheet		UNAUDITED FIGURES
€ mln	FY16	9M17
EQUITY AND LIABILITIES
EQUITY
Equity attributable to equity holders of the Parent	21.207	21.781
Equity attributable to Minority Interests	2.346	2.278
TOTAL EQUITY (C)	23.553	24.059
NON-CURRENT LIABILITIES
Non-current financial liabilities	30.469	28.592
Employee benefits	1.355	1.317
Deferred tax liabilities	293	313
Provisions	830	833
Miscellaneous payables and other non-current liabilities	1.607	1.600
TOTAL NON-CURRENT LIABILITIES (D)	34.554	32.655
CURRENT LIABILITIES
Current financial liabilities	4.056	4.307
Trade and miscellaneous payables and other current liabilities	7.646	6.727
Current income tax payables	637	148
Current liabilities sub-total (E)	12.339	11.182
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	11.182
TOTAL LIABILITIES (F=D+E)	46.893	43.837
TOTAL EQUITY AND LIABILITIES (C+F)	70.446	67.896

Net Cash Flow & Net Debt Dynamics

UNAUDITED FIGURES

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

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

			Domestic Business Results - Reported Figures
	1Q16	Δ% yoy	2Q16	Δ% yoy	3Q16	Δ% yoy	4Q16	Δ% yoy	FY16	Δ% yoy	1Q17	Δ% yoy	2Q17	Δ% yoy	3Q17	UNAUDITED FIGURES 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%
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%
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%
€ 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
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
EBITDA Margin	41,2%		46,6%		47,8%		42,9%		44,6%		44,4%		45,2%		44,4%
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%
% on revenues	21,9%		21,5%		21,7%		33,0%		24,7%		17,3%		25,9%		40,6%
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%
(1) M2M included

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
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%
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%
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%
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%
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%
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%
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%
NGN	170	-	199	-	247	-	353	-	353	-	481	-	632	-	763	-
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%
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%
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%
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%
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%
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
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%
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%
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%
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%
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%
Traffic	324	-8,4%	323	-10,1%	306	-11,9%	306	-9,9%	1.259	-10,1%	297	-8,4%	305	-5,6%	290	-5,1%
Access	515	-15,9%	489	-16,6%	470	-16,3%	463	-14,1%	1.937	-15,8%	445	-13,5%	449	-8,0%	437	-7,0%
Other Voice	62	-14,4%	62	-10,6%	60	-11,6%	61	-5,9%	246	-10,8%	59	-5,1%	58	-7,1%	58	-3,6%
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%
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%
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%
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%
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%
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%
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%
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%

		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
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%
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
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%
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%
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%
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%
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%
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%
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%
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%
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
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%
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%

(1) M2M included

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

(3) Net of visitors

(4) Outgoing voice revenues include roaming revenues

TIM Brasil Results -		Reported Figures
----------------------	--	------------------

		UNAUDITED 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
KPI's - Mobile only
Estimated Total Penetration (%)	125,4%		123,0%		121,6%		118,0%				117,2%		116,7%		115,9%
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
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%
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	+11,4%
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%
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
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%
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%
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%
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%
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
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%
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
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%
% 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
	1Q16	Δ% yoy	1H16	Δ% yoy	9M16	Δ% yoy	FY16	Δ% yoy	FY16		1Q17	Δ% yoy	1H17	Δ% yoy	9M17	Δ% yoy
Exchange rate AVG YTD (R\$ vs. euro)	4,29753		4,13001		3,96106		3,85935		3,85935		3,34707		3,44195		3,53378

(1) Includes company lines

(2) Gross of visitors

Δ% yoy Δ% yoy 3Q16 3Q17 reported organic Non Organic Non Organic Reported Figures (a) Non Organic elements (b) Reported figures (e) recurring figures recurring figures * (h=e/a-1) (i=g/d-1) items (c) (d=a+b+c) items (f) (g=e+f) Change in € mln Exchange consolid. rate impact area REVENUES REVENUES 3.789 (4) 3.785 Domestic Domestic 3.818 3.818 0,8 1.064 (19) 1.045 Brasile Brasile 1.096 1.096 3,0 (10) (10) (7) Other Activities & Eliminations Other Activities & Eliminations (7,0) 30,0 TI Group 4.843 (23) 4.820 TI Group 4.907 4.907 1,3 EBITDA EBITDA 1.811 (2) 56 1.865 1.694 126 1.820 Domestic Domestic (6,5) 344 (2) 6 348 408 0 408 Brasile Brasile 18,6 (3) (3) (3) 1 (2) Other Activities & Eliminations Other Activities & Eliminations 2.152 (4) 62 2.210 2.099 127 2.226 TI Group TI Group (2,5) EBITDA Margin EBITDA Margin 47,8% 49,3% 44,4% 47,7% -3,4 pp Domestic Domestic 32,3% 33,1% 37,2% 37,0% 4,9 pp Brasile Brasile TI Group 44,4% 45,9% TI Group 42,8% 45,4% -1,6 pp EBIT EBIT Domestic Domestic 994 (1) 56 822 156 978 (17,3) 1.049 Brasile Brasile 89 1 6 96 146 (1) 145 64,0 Other Activities & Eliminations Other Activities & Eliminations (2) (5) 1 (4) (2) TI Group TI Group 1.081 0 62 1.143 963 156 1.119 (10,9) EBIT Margin EBIT Margin Domestic Domestic 26,2% 27,7% 21,5% 25,6% -4,7 pp Brasile Brasile 8,4% 9,1% 13,3% 13,1% 4,9 pp TI Group TI Group 22,3% 23,7% 19,6% 22,8% -2,7 pp Non recurring items on EBITDA 3Q16 3Q17 Non recurring items on EBIT 3Q16 3Q17 Labour cost 53 9 Labour Costs 53 9 Other Costs & Charges 9 118 Other Costs & Charges 9 147 Total 62 127 Total 62 156	€ mln Revised			Reported & Organic Figures (*): YoY trends		UNAUDITED FIGURES
							0,9
							4,7
							30,0
							1,8
							(2,4)
							17,0
							0,7
							-1,6 pp
							3,9 pp
							-0,5 pp
							(6,8)
							49,7
							(2,1)
							-2,1 pp
							4 pp
							-0,9 pp

€ mln Domestic Reported, Organic Ebitda and Organic Like for Like

									UNAUDITED FIGURES				UNAUDITED FIGURES
	1Q17	1Q16		Δ yoy	2Q17	2Q16		Δ yoy	3Q17	3Q16		Δ yoy	9MQ17	9M16		Δ yoy
			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%	5.055	4.995	60	+1,2%
Exchange Rate Impact Labour Costs	5	1 65	(1) (60)		0 5	1 2	(1) 3		0 9	(2) 47	2 (38)		19	114	0 (95)
Other Operating Expenses Other Charges	19	2	17 0		64 2	14 0	50 2		116 1	9 0	107 1		199 3	25	174 3
Non recurring Items	24	68	(44)		71	17	54		126	54	72		221	139	82
Organic EBITDA	1.645	1.529	116	+7,6%	1.811	1.740	71	+4,1%	1.820	1.865	(45)	-2,4%	5.276	5.134	142	+2,8%
EU Roam-Like-at Home Shift from modem rent to sale Wholesale IRU Transaction Purchasing incentive recognized as opex reduction / Income	(39) (19)		0 (39) 0 (19)		0 (41) 0 (50)	0 0 0 (42)	0 (41) 0 (8)		36 (32) 0 (9)	0 (6) (86) (5)	36 (26) 86 (4)		36 (112) (78)	(6) (86) (47)	36 (106) 86 (31)
2015 Annual bonus provision Last technical support payment relating to the Argentina sale Non linear Items	(58)	0	0 0 (58)		0 0 (91)	(66) 0 (108)	66 0 17		0 0 (5)	0 (27) (125)	0 27 120		(154)	(66) (27) (233)	66 27 79
Organic Like for Like EBITDA	1.587	1.529	58	+3,8%	1.720	1.632	88	+5,4%	1.815	1.740	75	+4,3%	5.122	4.901	221	+4,5%