Telecom Italia (TIT) Q2 2024 earnings summary

Executive summary

• NetCo disposal completed July 1, 2024, resulting in significant deleveraging, credit rating upgrades, and optimized capital structure; transformation plan execution on track with 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%, ahead of guidance; strong contributions from Brazil and Enterprise.

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

• Net loss for the period improved to €503 million from €673 million in H1 2023; loss attributable to owners of the parent at €646 million.

• No immediate plans for legal separation of Consumer and Enterprise; focus remains on operational performance.

Financial highlights

• Group revenues grew 3.5% year-over-year to €7.1 billion; domestic revenues up 1.6% to €4.9 billion; TIM Brasil service revenues up 7.6% to €2.2 billion.

• Group EBITDA after lease increased 13% year-over-year to €1.8 billion; EBITDA margin improved to 30.1%; domestic EBITDA at €1.0 billion (+8.5% YoY), Brazil at €1.1 billion (+9.9% YoY).

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

• Capital expenditures for H1 2024 were €963 million, down 1.8% YoY; domestic capex €548 million, Brazil €415 million.

• Positive net cash flow of €0.6 billion expected in H2 2024.

Outlook and guidance

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

• Leverage target below or equal to 2x by year-end 2024 confirmed.

• 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.