Telecom Italia S.p.A.

In the first half, group revenue increased 2.0% year over year to EUR 6.8 billion. EBITDA after lease increased 1.2% to EUR 1.8 billion, while underlying EBITDA after lease grew 6.3% excluding the MVNO transition. The MVNO effect reduced first-half revenue by around EUR 80 million and EBITDA after lease by approximately EUR 84 million. CapEx was EUR 0.9 billion, or 12.6% of revenue, equity free cash flow reached EUR 0.7 billion, and net debt after lease was EUR 7.3 billion with leverage at 1.94x. For the second quarter, OpEx rose 1.9% year over year and CapEx was EUR 0.4 billion, equal to 12.7% of revenue. Management confirmed full-year 2026 guidance: group revenue growth of 2% to 3%, EBITDA after lease growth of 5% to 6%, CapEx intensity below 14% of revenue, and approximately EUR 1.8 billion of equity free cash flow after lease. For 2027, the company targets roughly 3% revenue CAGR from 2024 to 2027, 6% to 7% EBITDA after lease CAGR, CapEx intensity around 13% of revenue, and about EUR 1.1 billion of equity free cash flow after lease.

Pietro Labriola framed the quarter as one of execution, saying TIM is delivering on its commitments and building long-term value through operating performance, capital structure simplification, and shareholder returns. He emphasized that the MVNO transition is a temporary headwind, not a reflection of business health, and repeatedly pointed to improving underlying trends, especially in profitability and cash generation. Strategically, he highlighted value over volume in consumer, growth in enterprise and Brazil, and the next phase of growth through digital sovereignty, AI, and broader service offerings.

Piergiorgio Peluso focused on disciplined financial management. He said second-quarter OpEx rose EUR 44 million, with most of the increase from Brazil, while domestic OpEx was only up 1.0% and partly offset by lower labor and industrial costs; he also noted Italy has hedged around 80% of expected 2026 energy consumption and about 50% for 2027. Cash flow benefited from the just-below-EUR 1.0 billion 1998 concession fee reimbursement, helping generate more than EUR 1.0 billion of equity free cash flow in the quarter, while below-EFCF items included EUR 61 million of TIM Brasil minority dividends, EUR 692 million tied to savings share conversion, EUR 240 million for the I-Systems deal, and EUR 48 million for buybacks. He reiterated leverage stability at 1.94x.

Analysts pressed on weak fixed-line trends, broadband ARPU slowing, FiberCop service quality, INWIT and FiberCop negotiations, spectrum renewal, energy assumptions, and the Poste fairness opinion. Management said fixed-line softness was driven by earlier price increases, legacy voice disconnects, and a slight deterioration in delivery and assurance from the wholesale fiber provider, which they said is affecting all operators and is not structural. On the Poste deal, management said the fairness opinion was based on the offer terms and market conditions at launch and cannot be revisited daily; on energy, they said guidance already reflects hedging and active trading/coverage management, with no change to targets.