Telecom Italia (TIT) Q2 2024 TU earnings summary

Executive summary

• NetCo disposal completed, resulting in significant deleveraging, credit rating upgrades, and capital structure optimization, with €14.2 billion gross debt deconsolidated and over €100 million in savings.

• H1 2024 performance robust, with group revenues up 3.5% year-over-year to €7.1 billion and EBITDA after lease up 13% to €1.8 billion, ahead of guidance.

• Transformation plan execution on track, with strong contributions from Domestic, Enterprise, and Brazil segments.

• Full-year 2024 guidance confirmed across all metrics, with positive outlook for H2 supported by ongoing initiatives.

• Net financial debt after lease reduced to €8.1 billion post-NetCo sale, significantly improving leverage.

Financial highlights

• Group revenues grew 3.5% year-over-year to €7.1 billion; domestic revenues up 1.6% to €4.9 billion, with acceleration in Q2.

• Group EBITDA after lease increased 13% year-over-year to €1.8 billion; margin up two percentage points to 30.1%.

• TIM Brasil service revenues up 7.6% year-over-year to €2.2 billion; EBITDA after lease up 17.8%.

• Capital expenditures for H1 2024 were €963 million, with domestic capex €548 million and Brazil €415 million.

• Adjusted net debt after lease reduced from €21.5 billion to €8.1 billion post-NetCo disposal.

Outlook and guidance

• Full-year 2024 guidance confirmed: group revenues +3-4%, EBITDA after lease +8-9%, capex ~15% of revenues.

• Leverage target of ≤2x by year-end 2024 reiterated.

• H2 growth expected, supported by FTTH expansion, repricing, and new service offerings.

• Cloud revenues in enterprise expected to surpass connectivity by 15% by year-end.

• Pro forma liquidity after NetCo sale covers maturities until 2028.