Telecom Italia (TIT) Q3 2024 earnings summary

Executive summary

• Group revenues for the first nine months of 2024 reached €10.7 billion, up 3.4% year-over-year; domestic revenues rose 1.8% to €7.4 billion, and Brazil revenues increased 7.2% to €3.3 billion.

• Group EBITDA after lease grew 11.1% year-over-year to €2.7 billion, with domestic up 8.3% to €1.5 billion and Brazil up 14.4% to €1.3 billion.

• Net financial debt after lease fell below €8 billion, reflecting the successful completion of the NetCo sale and ongoing deleveraging.

• The sale of NetCo to KKR finalized in Q3 2024, marking a major transformation and enabling a new business model focused on industrial components.

• Cost containment and efficiency measures achieved 80% of the annual target, supporting profitability.

Financial highlights

• Group service revenues rose 4.1% year-over-year to €10 billion; domestic service revenues up 2.7% to €6.8 billion, Brazil up 7.1% to €3.2 billion.

• Group EBIT for the first nine months was €1.3 billion, up 42.8% year-over-year; net loss attributable to owners was €509 million, improved from a €1,124 million loss in 2023, aided by NetCo sale proceeds.

• Capex for the period was €1.37 billion, down 7.4% year-over-year; domestic capex €814 million, Brazil €558 million.

• Operating free cash flow was €1.74 billion, up from €1.62 billion in 2023; equity free cash flow after lease was -€835 million, a slight improvement year-over-year.

• Adjusted net financial debt after lease at €7.99 billion, down from €20.35 billion at end-2023.

Outlook and guidance

• Guidance for 2024 is confirmed, with the group on track to meet deleverage targets and maintain a net financial debt after lease to organic EBITDA after lease ratio at or below 2x.

• Further acceleration in domestic EBITDA after lease expected in Q4, with full-year guidance reaffirmed.

• The closing of the INWIT stake sale is expected to bring in €250 million in proceeds by November 29, 2024.

• 2024–2026 CAGR targets: group revenues ~3%, EBITDA after lease ~8%, leverage 1.6–1.7x at target.