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Telecom Italia Group - 1Q 2014 Results
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MARCO PATUANO – PIERGIORGIO PELUSO
TELECOM ITALIA GROUP
1Q ’14 ResultsMilan, May 13th 2014
Telecom Italia Group 1Q 2014 Results
1MARCO PATUANO - PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Safe HarbourThese presentations contain statements that constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Thesestatements appear in a number of places in this presentation and include statements regarding the intent, belief or current expectations of developments and changesin the customer base, estimates regarding future growth in the different business lines and the global business, market share, financial results and other aspects of theactivities and situation relating to the Telecom Italia Group. Such forward looking statements are not guarantees of future performance and involve risks anduncertainties, and actual results may differ materially from those projected or implied in the forward looking statements as a result of various factors. Consequently,Telecom Italia makes no representation, whether expressed or implied, as to the conformity of the actual results with those projected in the forward lookingstatements. Forward-looking information is based on certain key assumptions which we believe to be reasonable as of the date hereof, but forward looking informationby its nature involves risks and uncertainties, which are outside our control, and could significantly affect expected results. Analysts and investors are cautioned not toplace undue reliance on those forward looking statements, which speak only as of the date of this presentation. Telecom Italia undertakes no obligation to releasepublicly the results of any revisions to these forward looking statements which may be made to reflect events and circumstances after the date of this presentation,including, without limitation, changes in Telecom Italia business or acquisition strategy or planned capital expenditures or to reflect the occurrence of unanticipatedevents. Analysts and investors should consult the Company's Annual Report on Form 20-F as well as periodic filings made on Form 6-K, which are on file with the UnitedStates Securities and Exchange Commission which may identify factors that affect the forward looking statements included herein.The accounting policies adopted in the preparation of the Abbreviated Consolidated Financial Statements as of and for the three months ended 31 March 2014 havebeen applied on a basis consistent with those adopted in the Annual Consolidated Financial Statements at 31 December 2013, to which reference can be made, exceptfor the new standards and interpretations adopted by the Telecom Italia Group which didn’t impact on the Abbreviated Consolidated Financial Statements as of and forthe three months ended 31 March 2014. Please note that the limited review on the Telecom Italia Abbreviated Consolidated Financial Statements at 31 March 2014 hasnot yet been completed.Following the classification, starting from the fourth quarter 2013, of the Sofora - Telecom Argentina group as a disposal group (Discontinued operations/Non-currentassets held for sale) the consolidated financial statements data of prior periods (including the first quarter 2013) have been restated accordingly and therefore theSofora - Telecom Argentina group is no longer separately presented as a business unit.Furthermore:• starting from the first quarter 2014, Organic change in Revenues, EBITDA and EBIT are determined excluding, where applicable, only the effects of the change in the
scope of consolidation and exchange differences and therefore don’t take into account, as in the past, non-organic income and expenses, including those non-recurring;
• effective as of and for the three months ended 31 March 2014, the results of the Olivetti group are included in our “Domestic” business unit mainly as result of itscommercial and business activities as well as the complementarity of its products and services with respect to the ones offered by Telecom Italia in the domestic(Italian) market. In the past, the results of the Olivetti group were included in the “Olivetti” business unit;
as a result, the data for prior periods under comparison have been restated, accordingly.
2MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Agenda
• TI 1Q’14 Results
• Progressing in TI’s new course
• Financial Update
• Take-Aways
• Appendix
3MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Reve
nues
1Q’14 Reported
Telecom Italia 1Q’14 Results€mln, %YoY
Ebitd
aCa
pex
GroupDomesticBrazil
GroupDomesticBrazil
GroupDomestic
o/w innovative
Brazil
5,1883,7281,451
2,2001,792
406
684493130
189
Organic(1)
-11.9%-8.3%
-18.8%
-8.4%-8.2%
-12.3%
-10.7%-14.9%
+35%
+6.2%
-6.2%-8.3%-0.2%
-5.7%-8.2%
+7.8%
-5.8%-14.9%
+30.4%
-4.3%-6.6%
-1.2%-9.5%
net of new SAC policy
Weight(2)€mln YoY YoY
72%28%
81%18%
72%
28%
(1) Starting from 2014, Organic performance includes only exchange rate variations and impacts from perimeter changes(2) Including TI Media, other & elimination. Olivetti is now included in the Domestic perimeter
Ebitd
a-C
apex
GroupDomesticBrazil
1,5161,299
217
-7.3%-5.5%
-23.9%86%
14%
-5.7%-5.4%-6.4%
n.a.n.a.
n.a.n.a.
4MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
34
1Q'13 1Q'14
34
1Q'13 1Q'14
3,895 3,554
171 174
1Q'13 1Q'14
Domestic (1) Performance Dashboard
4,0663,728-8.3%
Total Revenues
Ebitda - Capex
on revenues 48.0% 48.1%
Reported data, €mln, %YoY
Capex
-8.8%
+1.9%Handsets
Services
579493SAC(2)
-9.5%
net of newSAC policy
-14.9%
Ebitda
SAC(2)1,953
1,792-8.2%
-6.6%
net of newSAC policy
-10.1%-10.5%
-9.1% -9.1%-8.8%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Service Revenues Trend
14.2% 13.2%
-14.9%
-19.1% -18.2%-15.0%
-5.5%
1Q'13 1H'13 9M'13 FY'13 1Q'14
YoY
YoY
1) Including Olivetti in the Domestic Perimeter 2) SAC FY’13: 188 mln euro
5MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
-19%-19%
-16% -16% -16%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
FY’13 -17.3%
48 20
645503
465
455
47
39
87
83
80
76
1Q'13 1Q'14
Domestic Mobile RevenuesTotal Revenues Retail Revenues Trend
business generated
businessreceived
1,2921,099
handsets
total 1,3721,175
-22.0%
-14.4%
-5.7%
-14.9%
YoY
Reported data, €mln, %YoY
retailservice 1,205
1,017
wholesale& others
totalservice
-15.7%
-15.6%
-4.7%
1,159978
-2.3%
-15.6
VAS
voice
fees&others -58.6%
-17%
-20%-22% -22% -22%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
FY’13 -20.2%
voic
ese
rvic
e
-8%-6%
-1%
+2%
-2%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
FY’13 -3.2%VAS
6MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
31.9 31.7 31.6 31.2 31.0
21%28%
82% 83%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
-6%
+5%
+29%
-14% -14%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Customer Base
28.4%
29.2%
34.8%
29.1%
24.0%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Churn
mln, %
BB users
MNP: Market Volume & TIM balance‘000, YoY
-396 -413
+72
-149 -57
+41%
+38%+39%
-21%-29%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
TIM balance Market Volume (YoY)
Calling CB
annualized
Domestic Mobile KPIsGross Adds
~9.0 mln
% YoY
7MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
1,259 1,124
401 401
273 267
56 48
709618
283 301
46
56
1Q'13 1Q'14
-7.5%
-7.9%
-7.3%
-8.0%
-7.3%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Domestic Fixed RevenuesTotal Revenues
Reported data, €mln, %YoY
access&voice
internet
business data
other
retail service
domesticwholesale
Sparkle
equipments
total service
total
elim. & adj.
1,989
-10.8%
flat
-2.3%
n.m.-7.5%
-12.8%
+6.4%
-7.3%
+23.7%
-6.9%
1,840
2,9302,715
2,9762,771
Service Revenues TrendYoY
tota
l
-6.2% -6.0%
-6.8%
-8.2%
-7.5%
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
reta
il
8MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
+0.4%
-3.2%
-2.5%
+0.2%
+4.6%
1Q'13 1H'13 9M'13 FY'13 1Q'14
13,777 13,555 13,372 13,210 13,027
7,238 7,233 7,164 7,169 7,211
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Domestic Fixed KPIsFixed Access
21,016 20,788 20,536
OLO
TI re
tail
M/S 63.5% 63.4% 63.0%64.0%
20,378
Line Losses Trend‘000
-201 -222-183 -162 -183
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
20,238
62.5%
Highlights
QoQ
• TI’s customer base erosion due to different mix: stable contraction of TI Retail Calling accesses (-140k) and increasing disconnections of Retail OLOs Calling in TI Access Base (carrier selection and carrier preselection )
• Constant progression in Unified Communication Solutions adoption in Business Segment: number of lines optimization per site, increasing a more diversified ICT spending
ICT
9MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
+50+35
+50+67
2Q'13 3Q'13 4Q'13 1Q'14
965 1,014 1,045 1,084 1,122
1 1 4 15 45
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
6,984 6,933
6,892 6,915 6,933
1Q'13 2Q'13 3Q'13 4Q'13 1Q'14
Domestic Broadband KPIsBB Access
13,812 13,805 13,753
CB T
I re
tail
13,839‘000
13,928BB market
TI BB ARPU€/month 19.118.9 19.2
-36-51 -41
+23 +18
Fast BB AccessNe
t add
s
CB T
I ret
ail
Net a
dds
965 1,015 1,050 1,100 1,167‘000
QoQ
QoQ
+3.4%+3.5% +3.6%YoY
YoY Consumer +6.8%
19.2
+1.6%
+4.3%
19.2
+1.8%
+3.9%+6.6% +6.3%
SI & Alice 20 mega Fibre
10MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
1,454 1,451
1Q'13 1Q'14
TIM Brasil Performance Dashboard
flat
Revenues Ebitda
on revenues 25.9% 28.0%
Capex Highlights• Stable topline in a more difficult macro, competitive and regulatory
environment. Mobile service revenues grew by 4.9% YoY net of 25% MTR cut in February
• In 1Q’14 TIM maintains its market share (at 27.0% with 73.9mln subscribers) and still leads total customer base growth (TIM +4% YoY)
• Very strong cost control lead to a remarkable 8% growth in EBITDA with a very sound EBITDA Margin (at 28.0%)
• High commitment to Network Quality improvement: total Capex+30% YoY in 1Q14 (13% of revenues) around 95% allocated to infrastructure
Organic data, €mln, %YoY
377 406
1Q'13 1Q'14
+7.8%
145189
1Q'13 1Q'14
+30.4%
+4.9%
Mobile Service Revenuesnet of MTR
11MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
TIM Brasil: Increasing Offering Attractiviness in Post-Paid
Control & Control Express
Liberty Express
Liberty +[invoice]
Increase attractiveness for customers with potential data
demand
Extend Express proposition to Heavy users
Attract Heavy Users
3
1
2
Offers Objectives
12MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Agenda
• TI 1Q’14 Results
• Progressing in TI’s new course
• Financial Update
• Take-Aways
• Appendix
13MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
1Q'13 1Q'14
Innovation drives Commercial take-up & Efficiencies
Coverage - Municipalities
52
689
NGN
LTE
25
202
TI Main competitor
1Q'13 1Q'14
Total Domestic Capex
Network Capex
579
17% 26%
20% 33%
293303
-14.9%
+3.5%
+9pp
+13pp
innovative
innovative
Capex Efficiency
493network
€mln, %YoY
+42 -32
-29
-33
-34
-86
innovative traditional ITcommercial &
other subsidy Capex
Efficiency : -94 mln €
14MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
“Smart” opens the gate to Convergence
Sound take-up rate 1 Accretive on ARPU and KPIs3
1 week 2 week 3 week 4 week 5 week
Avg 15k/week
on-air TV fixed
mob
ile
new line
new
line
CB
CB -
+
+
++
ARPU
• More than 50% of «TIM Smart» activation are new fixed clients
• ~70% of «TIM Smart» activation are on existing CB
Option repricing ensuredcommercial consistency afterpromo phase
2
Unlimited minsvsfixed & mobile10€/m
Mobilevoice
800 mins/m vsfixed & mobile 10€/m
400 min/sms & 2GB 10€/m
SIM Plus
400 min/sms & 1GB 15€/m
15MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Commercial Evolution: Sparked-up by Strategic Projects
Mobile Towers
Rebranding
• Valorization of Infrastructure
• “TIM” as one single commercial brand
Strategic Projects
FixedUltra BB
Mobile Ultra BB
• Maximise return on investment
b
Convergentoffers
• Develop triple & quadruple play offersa
c
d
Maximise return on investments
• Strong leadership in connectivity as TI is the unique operator in Italy with a national footprint UBB Plan: NGN coverage of ~19% of population as of March 2014
• Good Progression in fiber take-up rate and value recognition in very-high «QoS»
• Strategic agreement with Sky is now closed: contents are a key reason for accelerating trend in BB adoption
• Capitalizing on the rational approach for 3G: data reduction in bundles supports our long term strategy
• Leverage on the leading position in 4G: best coverage, speedand reliability
• Premium Content based Services
LTE is a unique opportunity to change both the market approach and the pricing level
Fixed Ultra BB
Mobile Ultra BB
16MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Expand Economic Leadership with Fibre
xPositive Commercial
take-up
Geomarketing strategystarted in April
TI and SKY: the leaders in connectivity and video
content are now together for an exclusive offer
Customer satisfaction is
evident
43
1 2
17MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
• Commercial partnership for Sky Online (OTT SKY offer)
COMING SOON
TI & SKY: a strong Partnership
The Leaders in Connectivity and Content are together with
a unique offer
• Complete Sky Offer on Telecom Italia IPTV
COMING SOON
• Availability via mobile of SkyTG24 &…more to come!
• Accessibility over mobile of SkyGO and premium sport content with «connectivity embedded”
18MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Building new Value from a Rational Mobile Market
Entry level data pack
additional GB additional GB additional GB
+€
+€€
+€€€
price
data
4Gpushes up
data consuption
x
• Lever on «First Mover» advantage with a «Network Quality Strategy»
• “Best technological available approach” moves customers on 4G. Data hungry segments will pay more for more data
September - December 2013
• After 2013 aggressive summer campaign, mobile Italianmarket moved back to rationality on 3G: all the mainoperators reduced volumes in the «entry level pricing» offers
January - April 2014
• Further price recovery post Christmas Campaign and launch of “SMART” convergent offer
from May 2014…
• Long-term sustainability approach - increasing value per GB, through further reduction in 3G pack: data from 1GB/month to 0.5 GB/month
1
2
3
pricing bundle
data into bundle
MNP volume
sep-dec 13 jan-apr14 from may14…
1 2 3
• Sound growth in 4G smartphone penetration together with a good take-up rate of 4G options
• Around ~500k 4G Users @ the end of March; +25% vs Dec ‘13
Until now:Repairing the Market
From now on : leveraging on 4G competitive advantage
ARPU uplift on 4G
19MARCO PATUANO
TELECOM ITALIA GROUP1Q 2014 Results
Focus on LTE: Enhancing First-Mover AdvantangeSm
all S
cree
nLa
rge
Scre
en
% 4G options on 4G
smarthone
% 4G smartphoneon total CB smarthone
Customer Base 4G vs 3G
Data ARPU
Data Usage
3G 4G
x3
x2.5
% 4G options on 4G devices
% 4G device on totaltablet/key base
16%
19%22%
27%
dec '13 mar '14
15%16%
8%
15%
dec '13 mar '14
20PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Agenda
• TI 1Q’14 Results
• Progressing in TI’s new course
• Financial Update
• Take-Aways
• Appendix
21PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
1Q14 Net Debt Evolution Euro mln, Reported Data
+493
EBITDACAPEX∆ WC & Others
Operating FCF
(2,200)+684
+1,530
+14
∆ vs. 13
2012 YE
28,274
26,807
2013YEAdjusted
(40)
(25)
(65)
Disposals/Financial
Investments
+426
Cash Financial Expenses/
Financial Accruals
(10)
+208
+198
Cash Taxes/Other
Impacts
1Q13
28,767
27,529
1Q14 Adjusted
+78
(64)
+14
Operating FCF
(49)
+198
+149
Net CF from Disc.
Ops.
+423
+3
+722
+229
~ + 90m € Fistel payment in Brazil ~110m € EUR/AR$ FX
(1,238)
22PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Focus on Working Capital
SeveranceIndemnities,
Funds & Other
Net OtherReceivables/
PayablesTrade
ReceivablesInventories∆OWC & Other
1Q14
-1,530
-27 -77
-1,065
-333 -28
4.8
4Q13 1Q14
3.7 Includes FISTEL paymentfor ~320M€
1.4 0.7Capex
TradePayables
€ Bln
-1.1
∆OWC & Other1Q13
-1,572
Euro mln, Reported Data
FY11 FY12 FY13
-0.4
+0.2
-0.3
€ mln
Delta Operating Working Capital (impact on 1Q14 Cash Flow)
Reported Opex+Capex evolutionBrazil Last 3 YE ∆OWC and Others
23PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Progress on Domestic Opex Reduction
1,936
(50)2,113 (3)
(53)
1Q13 1Q14Commercial Industrial & G&A
Volume Driven
Euro mln, Reported Data
(177)
Personnel Costs
(72)
External Opex reduction
122m yoy net of COGs
Opex Reduction
24PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
(1) € 31,760 mln is the nominal amount of outstanding medium-long term debt. Including Mandatory Convertible Bond (€ 1,300 mln), discontinued operations (€ 27 mln), IAS adjustments (€ 540 mln) and current financial liabilities (€ 424 mln), the gross debt figure of € 34,051 mln is reached.N.B. Debt maturities are net of € 2,151 mln (face value) of repurchased (of which € 1,144 mln in 2013 and € 599 mln in 2014) own bonds (of which € 1,936 mln related to bonds due within 2016).
Loans (of which long-term rent, financial and operating lease payable € 1,239)
Drawn bank facilityBonds
11.7
5.2
6.5
Liquidity Margin Debt Maturities
Undrawn Portion of Facility/CommittedGroup Liquidity Position (Ex. Disc. Ops)
Euro bln Euro mln (1)
Robust Liquidity Margin and Well-Distributed Debt Maturities
Fully Covered Beyond 2016
907
1,386
864
973
925
1,040
1,192
7,2871,449
1,856
3,179
1,606
2,225
3,002
9,656
22,973
1,500
1,500
3,856
3,242
4,043
2,579
3,150
4,042
10,848 31,760
Within 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Beyond 2019 Total M/L TermDebt
25PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
TI Media Mux Project is moving on
65,4 Mbps 47 Mbps
> 800 Sites
95.3% population
Ca. 400 Sites
90.9% population
3 Channels 2 Channels
Total capacity
Channels
• Leading independent Network Operator in the Italian market with 5 operated digital MUX
• Prime commercial offer, leveraging on state-of-the-art technology and backbone capacity
• First- tier customer portfolio
• Opex and Capex synergies enabled
• Pro-forma annual turnover ~€100 mln
• Healthy cash generation
• Advisors appointed
• Final agreement signed on April 9th
• Closing of the transaction subject to Italian Authority approval (expected by the end of June)
• Next activities will be focused on operations integration
• A market sounding process will be launched shortly, aimed at identifying investors interested in the Combined Entity
26PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Brazil Tower deal: Process on track
Non-Binding Offers expected by End of May
• Dynamic Brazilian tower market maintains high attractiveness
• High level of interest shown to TIM process, both from financial and strategic investors
• Increasing mobile customers, data usage boost, coverage targets and technological evolution offer a significant growth profile in terms of towers and tenants
• TIM tower portfolio is one of the largest in Brazil: 6.5k towers nationwide, over 40% located in cities with more than 500k inhabitants
• Current co-tenancy (1.6x) is above Brazilian market average. Further opportunities are opened by important available space
• Only passive infrastructure elements in the perimeter (towers, poles, shelters, etc.) while the active transmission equipment will remain of TIM property
TIM tower portfolio
27PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Agenda
• TI 1Q’14 Results
• Progressing in TI’s new course
• Financial Update
• Take-Aways
• Appendix
28PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Telecom Italia Targets
Group Domestic Brazil
Organic data
RevenuesCagr ‘13-’16
StableNegative
Low Single DigitPositive
Mid Single Digit
EbitdaCagr ‘13-’16
StableNegative
Low Single DigitPositive
Mid Single Digit
Capex(1)
Cum. ‘14-’16<14€bln
Net Debt Adj/Ebitda 2016(2) ~ 2.1x(3)
Capex/Revenues~ 18%
Capex/Revenues~ 17%
(1) excluding spectrum(2) reported EBITDA(3) including announced equity strengtheningexcluding impact from non-organic items and FX. Avg exchange rate: Reais/€ 2.99
29MARCO PATUANO - PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Agenda
• TI 1Q’14 Results
• Progressing in TI’s new course
• Financial Update
• Take-Aways
• Appendix
30MARCO PATUANO - PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
-14.8%
+4.3%
-15.6%
-17.3%-12.8%
-18.8%
-3.2%
-62.1%
+5.9%
-20.2%+3.0%
-14.4%
-4.7%
-15.0%
-15.6%-15.6 %
-24.6%
-2.3%
-15.7%
-5.7%
-22.0%-58.6%
1Q’13 1Q’14 YoY FY’13 YoY
1,372 1,175
87 83
1,285 1,092
1,205 1,0171,159 978
693 523
465 455
47 39
80 76
645 50348 20
Domestic Mobile Revenues Breakdown
total
Reported data, €mln, %YoY
wholesale(1)
Consumer+Business
services
outgoing voice
VAS
business received
handsets
business generated(2)
(1) Including Visitors (2) Total Retail Service Revenues net of Incoming
voicefees&other
31MARCO PATUANO - PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Domestic Fixed Revenues BreakdownReported, €mln, %YoY
products
Service Wireline
Sparkle group
Wholesale Domestic
Retail Service
voice & access
internet
business data
other
elim. & other
1Q’13 1Q’14 YoY FY’13 YoY
46 56 +23.7% -10.9%
2,930 2,715 -7.3% -7.7%
283 301 +6.4% -9.2%
709 618 -12.8% -10.4%
1,989 1,840 -7.5% -6.8%
1,259 1,124 -10.8% -9.3%
401 401 -0.1% +0.8%
273 267 -2.3% -2.3%
56 48 n.m. n.m.
(52) (44) n.m. n.m.
Total Wireline 2,976 2,771 -6.9% -7.8%
32MARCO PATUANO - PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
Customer Care: operating KPIs
+5%
+2%
mar
ket
dyna
mic
sca
ring
prod
uctio
nca
paci
tycr
edit
prod
uctio
n ca
paci
tyFront End
(call)
Back Office (items)
Front End (call)
Back Office (items)
Head
coun
t
«make»«buy»
1° Q. 2014Contribution CS
on selling activities Cons
umer
Ente
rpris
e
1° Q. 2014 managed issue
Consumer: 1,9 mln
Enterprise: 1,1 mln
Sollecit64% qu
ality
(CSI
cus
tom
erca
re)
fixed
mob
ile
FTE
53%
10%
45%20%
75%60%
Access MNP BB ULL SI Cubo ready
59%
13%41%
11%
Access MNP(VoiceMobile)
BB ULL
7.47 7.54 7.64
7.04 7.00 7.05
1° Q. 2013 FY 2013 1° Q. 2014Consumer Enterprise (SME)
8.25 8.29 8.32
7.28 7.41 7.42
1° Q. 2013 FY 2013 1° Q. 2014Consumer Enterprise (SME)
+28%
+12%
1°Q.
201
4
3.94.5
1° Q. 2013 1° Q. 2014
+16%10348
10169
1° Q. 2013 1° Q. 2014
-179
52%54%
1° Q. 2013 1° Q. 2014
48%53%
1° Q. 2013 1° Q. 2014
«in-house» incidence
Front End
Back Office
15.116.2+7%
33MARCO PATUANO - PIERGIORGIO PELUSO
TELECOM ITALIA GROUP1Q 2014 Results
N.B.The figures are net of the adjustment due to the fair value measurement of derivatives and related financial liabilities/assets, as follows:- the impact on Gross Financial Debt is equal to 2,198 €mln (of which 698 €mln on bonds)- the impact on Financial Assets is equal to 917 €mln
Therefore, the Net Financial Indebtedness is adjusted by 1,281 €mln
Well-Diversified and Hedged DebtTotal Gross Debt net of Adjustment: Euro 34,051 mln
3.7% Op. Leases and long rent 1,257
5% Other 1,697
15% Banks & EIB 5,124
4.3% Bank Facilities 1,457
71.9% Bonds 24,490
Gross debt (of which 27 mln disc. Operations) 34,051 Financial assets (6,014)
of which Cash & CE and marketable securities (5,234) Cash & Cash Equivalent (3,945) Marketable securities (1,289)
Italian Government Securities (1,006) Other (282)
Discontinued operations (508)
Net Financial Position 27,529
Maturities and Risk Management
Cost of debt: 5.5%
Average debt maturity: 7.04 years (bond only 7.90 years)
Fixed rate portion on gross debt approximately 67.4%
Around 37% of outstanding bonds (nominal amount) is denominated in USD, GBP and YEN and is fully hedged
0.1% Discontinued operations 27
Euro mln