Half Year 2026 Telecom Italia SpA Earnings Call Transcript
Key Points
- Telecom Italia SpA (TIIAY) confirmed its full-year 2026 guidance, citing confidence from disciplined execution and visibility on business trajectory.
- Underlying group EBITDA after lease grew 6.3% in the first half, excluding the temporary MVNO transition impact, demonstrating improved operating leverage.
- The company successfully completed the conversion of saving shares and a reverse stock split, simplifying its equity story and capital structure.
- Telecom Italia SpA (TIIAY) fully collected the reimbursement of the 1998 concession fee, strengthening its financial position and supporting solid cash generation.
- TIM Enterprise delivered its 16th consecutive quarter of growth, with cloud revenues up 18.1% year-on-year, highlighting the success of its digital services strategy.
- TIM Brasil continued its strong performance with revenue growth of 6% and EBITDA after lease growth of 5.5%, confirming its role as a key growth engine.
- The company has hedged around 80% of its expected energy consumption for 2026 and 50% for 2027, providing protection against potential price volatility.
- Telecom Italia SpA (TIIAY) maintained a stable leverage profile at 1.94x, reflecting continued financial discipline and a strengthened balance sheet.
- The MVNO transition created a temporary headwind, reducing first-half revenues by around EUR80 million and EBITDA after lease by approximately EUR84 million.
- Fixed net additions slightly worsened in the quarter, partly due to service quality issues experienced by its main wholesale fiber provider, FiberCop.
- The company noted a slowdown in fixed ARPU growth, attributed to a widening gap between front-book and back-book pricing due to competitive market pressures.
- Telecom Italia SpA (TIIAY) faces ongoing competitive threats from energy providers entering the telecom market, which could pressure customer retention and pricing.
- The company's plan does not factor in potential benefits from market consolidation or revisions to the MSA pricing framework, limiting upside potential in its projections.
- The spectrum renewal process remains uncertain, with potential cash outflows starting in 2029, and the final mechanism depends on Italian government decisions.
- The company's ability to provide a full midterm guidance update was constrained by the legal framework of the ongoing public tender offer by Poste Italiane.
- Brazilian market is becoming more mature, and recent price competition increases could impact future growth, requiring a strategic shift towards new revenue streams.
And welcome to TIM's second-quarter first half 2026 results presentation. Paolo Lesbo Head of Investor Relations, will introduce the event.
Good morning, ladies and gentlemen, and thank you for joining TIM's second-quarter and first-half 2026 results presentation. I'm pleased to be here with the CEO, Pietro Labriola; the CFO, Piergiorgio Peluso; and the rest of the management team.
Today, we will walk you through the key highlights of the quarter and review the main operating and financial results. We will also provide an overview of the high-level assumptions underlying the valuation analysis supporting the Board assessment in the context of the fairness opinion process. As usual, the presentation will be followed by a Q&A session.
Before we begin, please refer to the safe harbor statement included in the presentation, which provides details on the reporting parameters. Consistent with our Q1 earnings call, today's session is also supported by AI, leveraging the digital twins
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