Telecom Italia S.p.A.

In the first half, group revenues increased 2.0% year on year to EUR 6.8 billion. EBITDA after lease increased 1.2% to EUR 1.8 billion, with underlying EBITDA after lease growth of 6.3% after adjusting for the MVNO impact. CapEx totaled EUR 0.9 billion, equal to 12.6% of revenues, and equity free cash flow reached EUR 0.7 billion. Net debt after lease was EUR 7.3 billion, with leverage at 1.94x. For the quarter, OpEx rose 1.9% year on year and CapEx was EUR 0.4 billion, or 12.7% of revenues. Management reaffirmed full-year 2026 guidance for group revenue growth of 2% to 3%, EBITDA after lease growth of 5% to 6%, CapEx intensity below 14%, and approximately EUR 1.8 billion of equity free cash flow after lease. They also outlined 2027 targets of around 3% revenue CAGR, 6% to 7% EBITDA after lease CAGR, CapEx intensity around 13%, and about EUR 1.1 billion of equity free cash flow after lease, while keeping leverage below 1.7x.

Pietro Labriola framed the quarter as one of execution, emphasizing that the company kept delivering on commitments across operating performance, capital structure, and shareholder returns. He said TIM is simplifying its equity story, improving capital efficiency, and building a stronger platform for the next phase of value creation, while continuing to prioritize value over volume in Italy and pushing higher-value services in consumer, enterprise, and Brazil. He also said external issues like FiberCop service quality, VAT split payment, and energy costs matter, but do not change the strategy.

Piergiorgio Peluso said second-quarter OpEx rose 1.9% year on year, mostly because of Brazil, where OpEx increased 4.9% on inflation and higher content costs; in Italy, OpEx rose only 1.0% and was tied mainly to revenue-driven items. He noted group CapEx of EUR 0.4 billion in the quarter and EUR 0.9 billion in the first half, both in line with the investment framework, and said energy hedges cover about 80% of expected 2026 consumption and about 50% of 2027 in Italy. On cash flow, he highlighted the just-below-EUR 1.0 billion concession-fee reimbursement, EUR 660 million of positive working capital contribution, EUR 98 million of financial charges, and more than EUR 1.0 billion of quarterly equity free cash flow; net debt after lease was EUR 7.3 billion and leverage 1.94x.

Analysts focused on weak fixed-line trends, FiberCop and INWIT discussions, broadband ARPU, spectrum rules, energy costs, and the Poste transaction fairness opinion. Management said fixed-line softness was driven by earlier price increases, legacy voice disconnections, and a slight deterioration in delivery and assurance from the wholesale fiber provider, which they said is not structural but must be fixed. On the Poste deal, management said the fairness view was set at launch and will not be revised during the offer period, and on energy they reiterated that they are hedged for about 50% of 2027 and will manage the rest through normal trading and risk management.