Telecom Italia S.p.a. · MIL:TIT
Telecom Italia — FY2012 Earnings Presentation
34 slides from Telecom Italia's earnings presentation, Feb 8, 2013
Slide 1: Telecom Italia – Domestic Market Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline February 8th , 2013 Telecom Italia – Domestic Market Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline MARCO PATUANO
Slide 2: Safe Harbour
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Safe Harbour These presentations contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places
Slide 3: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 2
Slide 4: Domestic Results: 2012 Figures
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Results: 2012 Figures Euro mln, Organic data, % Total Revenues EBITDA Revenues FY % on EBITDA Total 19,003 -5.8% Revenues 48.9% +0.4pp 49.3% 17,906 Target FY Target Reached Reached Mobile -7.0% 9,287 -4,9% 8,
Slide 5: Domestic Operating Free Cash Flow Evolution
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Operating Free Cash Flow Evolution Euro mln, Reported Data 1 2 3 +943 mln Δ EBITDA Δ Capex ΔWC % on 24.3% +6.8 pp Revenues 31.1% € bln 1 Cost Control € mln 2 Right Spending € mln 3 ΔW Capital ΔWC impacts o/w
Slide 6: Service Revenues Trend by Segment: Consumer & Business
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Service Revenues Trend by Segment: Consumer & Business Consumer Segment Trend – YoY% change Italian GDP Δ% YoY FY12: -2.1% -1.5pp YoY Consumer Confidence Index: 2005=100 FY12: 88 -10.2% YoY Business Segment Trend – Yo
Slide 7: Domestic Mobile Overview
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Mobile Overview Total Mobile Revenues Revenues Performance Comparison - Δ% YoY % YoY Total Total Mobile Revenues Revenues 7,114 -7.0% 6,616 Handsets +30.8% Total Service 6,755 Revenues -9.0% Wholesale & 6,147
Slide 8: Domestic Mobile: Customer Base Trend
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Mobile: Customer Base Trend Total SIM cards MNP Trend ‘000 Launch of new Out/In 2012 TIM Portfolio +36 - 68 2012vs2011 Balance ~+185* Market Churn Rate Highlights Total 2012 Avg Stable YoY performance in Net
Slide 9: Domestic Fixed Business
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Fixed Business ‘000, € mln Fixed Access Access Market Evolution TI -195 TI -180 TI -144 TI -155 OLO Total TI OLO +45 OLO +1 OLO -43 OLO +112 2011 OLO Net Adds FY12vs11 Wholesale 21,712 -150 -180 -187 -43 21,1
Slide 10: Domestic Fixed BroadBand Business
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Fixed BroadBand Business BroadBandAccess BB Revenues ‘000 Δ% YoY,€ Total Italian 13,031 +363 13,394 +215 13,609 BB Access 18.2 +3.8% 18.9 7,715 7,125 ARPU 7,020 4Q12 4Q11 Free BB Service +1.2% Flat 86% 87% 89
Slide 11: FY2012: Focus on Domestic Consumer Segment
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline FY2012: Focus on Domestic Consumer Segment Rational Upselling Drive Innovative Services Growth Growing with Bundle Snapshot on Calling CB +13% +14.4% YoY, excluding EU price cap on data Mobile ARPU +5% Gross Adds +29%
Slide 12: FY2012: Focus on Domestic Business Segment
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline FY2012: Focus on Domestic Business Segment Large SME Top Browsing YoY % Flat offers on CB Growing CB +17% YoY Normalized* Solid Browsing Mobile +6% YoY +2.3pp +2.6pp Reported Performance in TOP 2012 +3.1pp +3.2pp +8%
Slide 13: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 12
Slide 14: Italian Economic Outlook: Growth Forecasts Postponed
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Italian Economic Outlook: Growth Forecasts Postponed GDP Trend Consumer Spending New Outlook Old Outlook New Outlook Old Outlook Plan ’13-’15 Plan ‘12-’14 Plan ’13-’15 Plan ‘12-’14 Unemployment Rate Highlights Lower t
Slide 15: Italian TLC Market Evolution
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Italian TLC Market Evolution TLC Services Domestic Market 2012-20151 Revenues Trend 2013-2015 € bln Cagr ‘12-’15 TLC SERVICES Fixed+Mobile Cagr ‘12-’15 +3.0% & ICT 36.5 Products -2.0% ICT4 Cagr ‘12-’15 TLC SERVICES 27
Slide 16: TI Domestic: Business Layers & Actions
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic: Business Layers & Actions Traditional Access Protection Consumer Fixed Innovative Fixed & Mobile UBB, Cloud Services & Beyond Connectivity: Innovative Fiber & LTE Mobile Traditional Market Share Defence &
Slide 17: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 16
Slide 18: TI Domestic: Consumer Segment (1/2)
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic: Consumer Segment (1/2) Lock-in existing CB & ARPU Increase Value Focus on Mobile Broadband Defend CB through right repositioning Maintain best-in-class Churn Rate Increase MBB penetration via new & lock-u
Slide 19: TI Domestic: Consumer Segment (2/2)
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic: Consumer Segment (2/2) Defend Customer Base Value Leverage on Premium Position Enhance Value Protect CB increasing penetration of Sustain Top Positioning through TI Increase Service Penetration & flat off
Slide 20: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 19
Slide 21: TI Domestic: Business Segment (1/2)
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic: Business Segment (1/2) Total CB Large+SME: More than 1.7 mln Customers Traditional Services Innovative Services Fixed Mobile Fixed Mobile Top Customer profiling aimed at maintaining Increase current low c
Slide 22: TI Domestic: Business Segment (2/2)
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic: Business Segment (2/2) Total CB Large+SME: More than 1.7 mln Customers Traditional Services Innovative Services Fixed Mobile Fixed Mobile Top Customer profiling aimed at reducing Push on VAS & focus on Co
Slide 23: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 22
Slide 24: TI Domestic Efficiency Programs: Our Track Record
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic Efficiency Programs: Our Track Record Cumulative Opex Reduction 2008-2012 Strong track record in Opex reduction in the last 5 years, aimed at maintaining a leading position in Domestic ~-5.0 bln€ Profitabi
Slide 25: TI Domestic: New Efficiency Programs
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic: New Efficiency Programs € bln 1 2 3 Real Estate, Energy, TI Caring Services Division Business Division Industrial & Other -0.2 -0.5 -0.2 FY12 FY15 FY12 FY15 FY12 FY15 Domestic Opex Efficiency Program A -0
Slide 26: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 25
Slide 27: Investments: from "Value for Money" to "Money for Value"
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Investments: from “Value for Money” to “Money for Value” Internet Demand is Surging Double Digit Growth Deliver Content & Convergence Petabyte per Month To deliver requested Fixed & Mobile Cagr ‘12-’16 BroadBand Capac
Slide 28: TI Domestic Investments: Sustaining Technological Evolution
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline TI Domestic Investments: Sustaining Technological Evolution Total Domestic Capex 4 € bln New IT Services Division Pursue further efficiencies in IT in order Efficiency Program -0.1 to reduce incremental costs driven b
Slide 29: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 28
Slide 30: Take-aways on main TI Domestic trends
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Take-aways on main TI Domestic trends Organic data Macro-economic drag on Business Segment, impact from Regulation (MTR + Roaming Cap) and continued competitive pressure suggest a 2013 YoY performance similar to Reven
Slide 31: Agenda
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Agenda Domestic 2012 Preliminary Results Telecom Italia Domestic Plan Consumer Segment Business Segment Cost Efficiencies NGN & LTE Deployment Take-Aways Appendix MARCO PATUANO 30
Slide 32: Domestic Mobile Revenues
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Mobile Revenues Euro mln, Organic Data, % FY11 FY12 Δ % YoY Total 7,114 6,616 (7.0) Wholesale (*) 335 295 (11.8) Retail 6,779 6,321 (6.8) o/w Services 6,421 5,853 (8.8) o/w Business Generated (**) 5,635 5,317
Slide 33: Domestic Fixed Revenues
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Fixed Revenues Euro mln, Organic Data, % FY11 FY12 YoY % Total 13,501 12,810 (5.1) Sparkle Group 1,413 1,393 (1.4) Domestic Core Services 11,823 11,319 (4.3) Voice & Access 5,615 5,253 (6.5) Internet 1,573 1,
Slide 34: Domestic Efficiency Plan
TELECOM ITALIA GROUP Full-Year 2012 Preliminary Results and 2013-2015 Plan Outline Domestic Efficiency Plan Euro mln, Organic Data, % Cash Cost Delta Cash Cost Δ Δ Δ ITX Vol. Efficiency FY 12 vs FY 11 Driven Handsets: -94 Target FY : - 486 105% of FY12 D Abs 12.678 -332 + 381 FY ‘12 ’12 vs ‘11 Targe