(AGENPARL) – Tue 05 August 2025 ANNEXES TO THE PRESS RELEASE
TIM Group – Statements ……………………………………………………………………………………………………………………………………………
TIM Group – Separate Consolidated Income Statement …………………………………………………………………………………………….
TIM Group – Consolidated Statement of Comprehensive Income ………………………………………………………………………………
TIM Group – Consolidated Statement of Financial Position ………………………………………………………………………………………..
TIM Group – Consolidated Statement of Cash Flows ………………………………………………………………………………………………….
TIM Group – Net Financial Debt …………………………………………………………………………………………………………………………………
TIM Group – Change in Adjusted Net Financial Debt ………………………………………………………………………………………………….
TIM Group – Information by Operating Segment ……………………………………………………………………………………………………….
Domestic……………………………………………………………………………………………………………………………………………………………….
Brazil ……………………………………………………………………………………………………………………………………………………………………..
TIM Group – Headcount …………………………………………………………………………………………………………………………………………….
TIM Group – Effects of non-recurring events and transactions on each item of the Separate Consolidated Income
Statement ………………………………………………………………………………………………………………………………………………………………..
TIM Group – Debt structure, bond issues and maturing bonds …………………………………………………………………………………..
TIM Group – Alternative performance measures ……………………………………………………………………………………………………….
August 5, 2025
This document has been translated into English for the convenience of the readers.
In the event of discrepancy, the Italian language version prevails.
TIM GROUP – STATEMENTS
The reclassified Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of
Financial Position and Consolidated Statement of Cash Flows, as well as the Consolidated Net Financial Debt of the TIM Group,
presented below, are those reported in the Interim Report on Operations included in the Half-Yearly Financial Report at June 30,
2025 and have not been audited by the independent auditors.
These statements, as well as Consolidated Net Financial Debt, are consistent with those included in the TIM Group’s Consolidated
Financial Statements at June 30, 2025.
The accounting policies and consolidation principles adopted are consistent with those applied for the TIM Group Consolidated
Financial Statements at December 31, 2024, to which reference is made, except for the amendments to the standards issued by
IASB and adopted starting from January 1, 2025.
TIM GROUP – SEPARATE CONSOLIDATED INCOME
STATEMENT
(million euros)
1st Half 2025
1st Half
Changes
(a-b)
Revenues
Other income
Total operating revenues and other income
Acquisition of goods and services
absolute
6,597
6,660
(0.9)
6,732
6,709
(17.9)
(3,844)
(3,261)
(583)
Employee benefits expenses
(736)
(737)
Other operating expenses
(293)
(309)
Change in inventories
Internally generated assets
(81.5)
(21.1)
Operating profit (loss) before depreciation and amortization, capital
gains (losses) and impairment reversals (losses) on non-current assets
(EBITDA)
1,999
2,600
(601)
(23.1)
Depreciation and amortization
(1,473)
(1,571)
Gains (losses) on disposals of non-current assets
Impairment reversals (losses) on non-current assets
Operating profit (loss) (EBIT)
1,015
(486)
(47.9)
Share of profits (losses) of associates and joint ventures accounted for using
the equity method
(50.0)
(20.6)
Other income/(expense) from investments
Finance income
(142)
(1,030)
(1,486)
Profit (loss) before tax from continuing operations
(171)
(82.6)
Income tax expense
(168)
(97.7)
Finance expenses
Profit (loss) from continuing operations
Profit (loss) from Discontinued operations / Non-current assets held for sale
(675)
Profit (loss) for the period
(503)
Owners of the Parent
(132)
(646)
Non-controlling interests
(34.3)
Attributable to:
TIM GROUP – CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
In accordance with IAS 1 (Presentation of Financial Statements), the following Consolidated Statement of Comprehensive Income
include the Profit (loss) for the period as shown in the Separate Consolidated Income Statement and all non-owner changes in
equity.
(million euros)
Profit (loss) for the period
1st Half
1st Half
(503)
Other components of the Consolidated Statement of Comprehensive Income
Other items that will not be reclassified subsequently in the Consolidated Statement of
Comprehensive Income
Financial assets measured at fair value through other comprehensive income:
Profit (loss) from fair value adjustments
Income tax effect
Remeasurements of employee defined benefit plans (IAS19):
Actuarial gains (losses)
Income tax effect
Share of other comprehensive income (loss) of associates and joint ventures accounted
for using the equity method:
Profit (loss)
Income tax effect
(e=b+c+d)
Total other components that will not be reclassified subsequently to Separate
Consolidated Income Statement
Other components that will be reclassified subsequently to Separate Consolidated
Income Statement
Financial assets measured at fair value through other comprehensive income:
Profit (loss) from fair value adjustments
Loss (profit) transferred to Separate Consolidated Income Statement
Income tax effect
Hedging instruments:
Profit (loss) from fair value adjustments
(187)
Loss (profit) transferred to Separate Consolidated Income Statement
(132)
(446)
Income tax effect
Exchange differences on translating foreign operations:
Profit (loss) on translating foreign operations
Loss (profit) on translating foreign operations transferred to Separate Consolidated Income
Statement
Income tax effect
(446)
Share of other comprehensive income (loss) of associates and joint ventures accounted
for using the equity method:
Profit (loss)
Loss (profit) transferred to Separate Consolidated Income Statement
Income tax effect
(k=f+g+h+i)
(446)
(m=e+k)
(421)
(a+m)
(924)
Owners of the Parent
(905)
Non-controlling interests
Total other components that will be reclassified subsequently to Separate Consolidated
Income Statement
Total other components of the Consolidated Statement of Comprehensive Income
Total comprehensive income (loss) for the period
Attributable to:
TIM GROUP – CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
(million euros)
6/30/2025
12/31/2024
Changes
(a-b)
Goodwill
11,034
11,030
Intangible assets with a finite useful life
5,679
6,011
(332)
16,713
17,041
(328)
Property, plant and equipment owned
4,127
4,560
(433)
Rights of use assets
3,295
3,467
(172)
Investments in associates and joint ventures accounted for using the equity
method
Other investments
Non-current financial receivables arising from lease contracts
Assets
Non-current assets
Intangible assets
Tangible assets
Other non-current assets
Other non-current financial assets
(235)
Miscellaneous receivables and other non-current assets
1,717
1,795
Deferred tax assets
3,097
3,409
(312)
27,232
28,477
(1,245)
Total Non-current assets
Current assets
Inventories
Trade and miscellaneous receivables and other current assets
Current income tax receivables
4,096
4,146
Current financial assets
Current financial receivables arising from lease contracts
Securities other than investments, other financial receivables and other
current financial assets
2,175
1,651
Cash and cash equivalents
1,442
2,924
(1,482)
Current assets sub-total
3,655
4,619
(964)
8,076
9,186
(1,110)
1,028
1,028
1,139
Discontinued operations /Non-current assets held for sale
of a financial nature
of a non-financial nature
Total Current assets
Total Assets
1,139
9,215
9,186
(a+b)
36,447
37,663
(1,216)
(million euros)
6/30/2025
12/31/2024
Changes
(a-b)
Equity attributable to owners of the Parent
11,859
11,957
Equity attributable to non-controlling interests
1,340
1,404
13,199
13,361
(162)
Non-current financial liabilities for financing contracts and others
7,216
8,728
(1,512)
Non-current financial liabilities for lease contracts
2,482
2,421
Equity and Liabilities
Equity
Total Equity
Non-current liabilities
Employee benefits
Deferred tax liabilities
Provisions
(101)
Miscellaneous payables and other non-current liabilities
(238)
10,994
12,791
(1,797)
Current financial liabilities for financing contracts and others
3,967
3,870
Current financial liabilities for lease contracts
Trade and miscellaneous payables and other current liabilities
(320)
Total Non-current liabilities
Current liabilities
6,754
7,074
Current income tax payables
Current liabilities sub-total
11,248
11,511
(263)
of a financial nature
of a non-financial nature
1,006
Liabilities directly associated with Discontinued operations/Non-current
assets held for sale
Total Current Liabilities
Total Liabilities
Total Equity and Liabilities
1,006
12,254
11,511
(f=d+e)
23,248
24,302
(1,054)
(c+f)
36,447
37,663
(1,216)
TIM GROUP – CONSOLIDATED STATEMENT OF CASH FLOW
(million euros)
1st Half
1st Half
1,473
1,571
Cash flows from operating activities:
Profit (loss) from continuing operations
Adjustments for:
Depreciation and amortization
Impairment losses (reversals) on non-current assets (including investments)
Net change in deferred tax assets and liabilities
Losses (gains) realized on disposals of non-current assets (including investments)
Share of losses (profits) of associates and joint ventures accounted for using the equity
method
Change in employee benefits
Change in inventories
Change in trade receivables and other net receivables
Change in trade payables
(575)
(460)
Net change in income tax receivables/payables
Net change in miscellaneous receivables/payables and other assets/liabilities
1,855
(946)
(1,132)
Cash flows from (used in) operating activities
Cash flows from investing activities:
Purchases of intangible, tangible and right of use assets on a cash basis
Capital grants received
Acquisition of control of companies or other businesses, net of cash acquired
Acquisitions/disposals of other investments
Change in financial receivables and other financial assets (excluding hedging and nonhedging derivatives under financial assets)
Proceeds from sale that result in a loss of control of subsidiaries or other businesses, net of
cash disposed of
Proceeds from sale/repayments of intangible, tangible and other non-current assets
(879)
(784)
Cash flows from (used in) investing activities
Cash flows from financing activities:
Change in current financial liabilities and other
(150)
Proceeds from non-current financial liabilities (including current portion)
1,870
Repayments of non-current financial liabilities (including current portion)
(1,630)
(3,776)
Changes in hedging and non-hedging derivatives
Share capital proceeds/reimbursements (including subsidiaries)
Dividends paid
Changes in ownership interests in consolidated subsidiaries
Cash flows from (used in) financing activities
Cash flows from (used in) Discontinued operations/Non-current assets held for sale
(1,474)
(2,158)
(1,184)
(e=a+b+c+d)
(1,451)
(2,271)
Net cash and cash equivalents at the beginning of the period
2,924
2,912
Net foreign exchange differences on net cash and cash equivalents
(h=e+f+g)
1,472
Aggregate cash flows
Net cash and cash equivalents at the end of the period
(1) This item includes investments in marketable securities of 996 million euros in the first half of 2025 (1,234 million euros in the first half of 2024) and redemptions of
marketable securities of 1,133 million euros in the first half of 2025 (1,598 million euros in the first half of 2024), relating to TIM S.A. and Telecom Italia Finance S.A..
Purchases of intangible, tangible and right of use assets
(million euros)
1st Half
1st Half
Purchase of intangible assets
(382)
(386)
Purchase of tangible assets
(431)
(530)
Purchase of right of use assets
(337)
(370)
(1,150)
(1,286)
Total purchases of intangible, tangible and right of use assets on an accruals basis
Change in payables arising from purchase of intangible, tangible and right of use assets
Total purchases of intangible, tangible and rights of use assets on a cash basis
(946)
(1,132)
Additional Cash Flow information
(million euros)
1st Half
1st Half
Income taxes (paid) received
Interest expense paid
(584)
(1,180)
Interest income received
1st Half
1st Half
2,924
2,912
Dividends received
Analysis of Net Cash and Cash Equivalents
(million euros)
Net cash and cash equivalents at beginning of the period:
Cash and cash equivalents
Bank overdrafts repayable on demand
2,924
2,912
1,480
Net cash and cash equivalents at end of the period:
Cash and cash equivalents
Bank overdrafts repayable on demand
1,472
TIM GROUP – NET FINANCIAL DEBT
(million euros)
6/30/2025
12/31/2024
Change
(a-b)
Non-current financial liabilities
Bonds
6,070
7,527
(1,457)
Amounts due to banks, other financial payables and liabilities
1,146
1,201
Non-current financial liabilities for lease contracts
2,482
2,421
9,698
11,149
(1,451)
Bonds
2,504
2,401
Amounts due to banks, other financial payables and liabilities
1,462
1,469
Current financial liabilities for lease contracts
4,456
4,393
Current financial liabilities (*)
Financial liabilities directly associated with Discontinued operations/Non-current assets
held for sale
Total Gross financial debt
14,769
15,542
(773)
Non-current financial assets
Securities other than investments
Non-current financial receivables arising from lease contracts
Financial receivables and other non-current financial assets
(411)
(646)
(449)
(686)
Current financial assets
(1,441)
(1,539)
Current financial receivables arising from lease contracts
Securities other than investments
Financial receivables and other current financial assets
(734)
(112)
(622)
1,482
Cash and cash equivalents
Financial assets relating to Discontinued operations/Non-current assets held for sale
(1,442)
(2,924)
(3,655)
(4,619)
(111)
(111)
1,090
Total financial assets
(4,215)
(5,305)
Net financial debt carrying amount
10,554
10,237
(137)
(111)
10,417
10,126
Total adjusted gross financial debt
14,456
15,189
(733)
Total adjusted financial assets
(4,039)
(5,063)
1,024
Reversal of fair value measurement of derivatives and related financial liabilities/assets
Adjusted Net Financial Debt
Breakdown as follows:
(*) of which current portion of medium/long-term debt:
Bonds
2,504
2,401
Amounts due to banks, other financial payables and liabilities
(256)
Current financial liabilities for lease contracts
TIM GROUP – CHANGE IN ADJUSTED NET FINANCIAL
(million euros)
1st Half
1st Half
Change
(a-b)
EBITDA
1,999
2,600
(601)
Capital expenditures on an accrual basis
(834)
(938)
Change in net operating working capital:
(695)
(224)
(471)
Change in inventories
Change in trade receivables and other net receivables
(160)
Change in trade payables
(686)
(630)
Change in payables for mobile telephone licenses/spectrum
Other changes in operating receivables/payables
(299)
Change in employee benefits
Change in operating provisions and Other changes
(109)
Net Operating Free Cash Flow
1,347
(865)
% of Revenues
(12.9)pp
Cash flows from sales of investments and other disposals
Share capital increases/reimbursements, including incidental expenses
Financial investments
Dividends payment
Increases in lease contracts
(316)
(348)
Finance expenses, income taxes and other net non-operating requirements
(269)
(405)
Reduction/(Increase) in adjusted net financial debt from continuing
operations
(213)
(664)
Reduction/(Increase) in net financial debt from Discontinued operations/
Non-current assets held for sale
(1,283)
1,205
Reduction/(Increase) in adjusted net financial debt
(291)
(832)
1st Half
1st Half
Change
(291)
(832)
Equity Free Cash Flow
(million euros)
Reduction/(Increase) in adjusted net financial debt
Impact for finance leases (new lease operations and/or renewals and/or
extensions (-)/any terminations/early extinguishing of leases (+))
Payment of TLC licenses and for the use of frequencies
Financial impact of acquisitions and/or disposals of investments
Dividend payment and Change in Equity
Equity Free Cash Flow
(681)
TIM GROUP – INFORMATION BY OPERATING SEGMENT
Domestic
(million euros)
1st Half
1st Half
Changes
(a-b)
Revenues
4,547
4,418
EBITDA
1,507
(520)
(34.5)
% of Revenues
% of Revenues
17,073
(*)17,751
absolute
Headcount at period end (number) (°)
(12.4)pp
(485)
(87.1)
(11.0)pp
(678)
(3.8)
(*) Includes agency contract workers: 131 as of June 30, 2025 (63 as of December 31, 2024).
(*) The headcount is current at December 31, 2024.
Brazil
(million euros)
(million Brazilian reais)
Changes
1st Half
1st Half
1st Half
1st Half
absolute
(c-d)
(c-d)/d
Revenues
2,064
2,257
12,994
12,398
EBITDA
1,015
1,095
6,388
6,016
% of Revenues
2,892
2,532
% of Revenues
8,904
(*)9,123
Headcount at period end (number)
0.7pp
1.9pp
(219)
(2.4)
(*) The headcount is current at December 31, 2024.
TIM GROUP – HEADCOUNT
Average salaried workforce
(equivalent number)
1st Half
1st Half
Change
(a-b)
Average salaried workforce – Italy
14,125
14,407
(282)
Average salaried workforce – Outside Italy
8,705
8,859
(154)
Total average salaried workforce
22,830
23,266
(436)
Discontinued Operations
Total average salaried workforce – including Discontinued Operations (1)
18,821
(18,201)
23,450
42,087
(18,637)
Includes personnel on temporary employment contracts: 65 average salaried staff in Italy in the first half of 2025; 2 average salaried staff in Italy in the first half of
2024.
Headcount period end
(number)
6/30/2025
12/31/2024
Change
(a-b)
Headcount – Italy
17,031
17,521
(490)
Headcount – Outside Italy
8,959
9,366
(407)
25,990
26,887
(897)
Total headcount at period end
26,667
26,887
(220)
6/30/2025
12/31/2024
Change
(a-b)
Domestic
17,073
17,751
(678)
Brazil
8,904
9,123
(219)
25,990
26,887
(897)
Discontinued Operations
Total headcount at period end – including Discontinued Operations (1)
Includes personnel on temporary employment contracts: 131 in Italy as of June 30, 2025; 63 in Italy as of December 31, 2024.
Headcount at period end – Breakdown by Business Unit
(number)
Other Operations
Total
TIM GROUP – EFFECTS OF NON-RECURRING EVENTS AND
TRANSACTIONS ON EACH ITEM OF THE SEPARATE
CONSOLIDATED INCOME STATEMENT
about the impact of non-recurring events and transactions on the individual items of the Separate Consolidated Income
Statement:
1st Half
1st Half
Expenses from regulatory litigation and sanctions and contingencies, other provisions and expenses
Impact on Operating profit (loss) before depreciation and amortization, capital gains (losses) and
impairment reversals (losses) on non-current assets (EBITDA)
(million euros)
Operating revenues and other income:
Other income – Contingent gain
Acquisition of goods and services, Change in inventories:
Acquisition of goods and services – Expenses related to agreements and the development of non-recurring
projects and other expenses
Employee benefits expenses:
Charges connected to corporate reorganization/restructuring and other costs
Other operating expenses:
Gains (losses) on disposals of non-current assets:
Gains on disposals of non-current assets
Impact on Operating profit (loss) (EBIT)
Other income (expenses) from investments:
Other (expenses)/income from corporate operations
Finance income:
Other finance income
Finance expenses:
Other finance expenses
Impact on profit (loss) before tax from continuing operations
Income tax expense on non-recurring items
Income (expense) relating to Discontinued operations / Non-current assets held for sale
Impact on profit (loss) for the period
(138)
(128)
TIM GROUP – DEBT STRUCTURE, BOND ISSUES AND
MATURING BONDS
Revolving Credit Facility
The following table shows committed credit lines(*):
(billion euros)
6/30/2025
12/31/2024
Agreed
Drawn down
Agreed
Drawn down
Revolving Credit Facility – April 2030
Total
(*) In accordance with the contract signed, the Banks have committed to make the funds available on demand (with at least 3 days’ notice). As this is a “Committed”
line, the banks have no mechanisms in place not to honor the request for funds made by the Company, without prejudice to the market standard early mandatory
cancellation clauses (Natural contract expiry, Change in control, Borrower illegality, Events of default each as defined in the contract).
On March 31, 2025, TIM signed an agreement to amend the existing Revolving Credit Facility, effective April 4, 2025, extending its
maturity to April 4, 2030 and reducing the amount from 4 billion euros to 3 billion euros.
Bonds
The change in bonds in the first half of 2025 was as follows:
(millions of original currency)
Currency
Amount
Repayment date
Repayments
TIM Brasil 5,000 million BRL CDI+2.3%
1/27/2025
TIM S.p.A. 1,000 million euros 2.750%
1,000
4/15/2025
TIM Brasil 5,000 million BRL CDI+2.3%
4/25/2025
The nominal redemption value of bonds maturing in the 18 months following June 30, 2025 issued by TIM S.p.A., TIM Brasil and TIM
S.A. is 2,412 million euros, as detailed below:
TIM S.p.A:
1,000 million euros, maturing on September 30, 2025;
375 million euros, maturing on January 28, 2026;
678 million euros, maturing on May 25, 2026;
Brazil BU:
1,765 million reais (equivalent to 276 million euros as of 6/30/25), divided into quarterly maturities starting in July 2025;
533 million reais (equivalent to 83 million euros as of 3/31/25), maturity June 2026.
The bonds issued by TIM S.p.A., Telecom Italia Finance S.A. and Telecom ltalia Capital S.A. do not contain financial covenants of
any kind (e.g. Debt/EBITDA ratio, EBITDA/Interest, etc.) or clauses that would entail the automatic early repayment of loans in the
event of non-insolvency events of the TIM Group; moreover, the repayment of bonds and the payment of interest are not backed
by specific guarantees, nor are there any commitments to issue future guarantees, with the exception of the full and unconditional
guarantees granted by TIM S.p.A. for bonds issued by Telecom Italia Finance S.A. and Telecom Italia Capital S.A..
Since these are mainly transactions placed with institutional investors on the main global capital markets (Euromarket and USA),
the terms governing the loans are in line with the market practice for similar transactions carried out on the same markets.
The documentation concerning the loans taken out by TIM contain the usual other types of covenants, including the commitment
not to pledge the Company’s assets as collateral for loans (negative pledge) and the commitment not to change the business
purpose or sell the assets of the Company unless specific conditions exist (e.g. the sale takes place at fair market value). Covenants
with basically the same content can be found in the export credit loan agreement.
In the loan agreements, TIM is required to provide notification of change of control. Events constituting a change of control and the
applicable consequences – including, at the discretion of the investors, the establishment of guarantees or the early repayment of
the amount paid in cash and the cancellation of the commitment in the absence of agreements to the contrary – are specifically
identified in each agreement.
In addition, the outstanding loans generally contain a commitment by TIM, any breach of which constitutes an Event of Default,
not to implement mergers, demergers or transfers of business, involving entities outside the Group, except where certain
conditions exist. Such an Event of Default may entail, upon request of the Lender, the early repayment of the drawn amounts and/
or the annulment of the undrawn commitment.
On May 19, 2021 – specifically with regard to the loans taken out by TIM with the European Investment Bank (“EIB”) – TIM extended
the loan taken out in 2019 (initial for 350 million euros) by an additional 120 million euros.
In addition, on May 5, 2023, TIM took out a loan with the EIB for 360 million euros, partially guaranteed by SACE. This guarantee
was definitively terminated on June 27, 2025.
Therefore, at June 30, 2025 the nominal total of outstanding loans with the EIB was 830 million euros.
Loans taken out with the EIB contain the following covenants and commitments, among others:
if the Company is subject to a merger, demerger or transfer of a business unit outside the TIM Group, or disposes of, divests or
transfers assets or business units (with the exception of certain disposals expressly permitted), it must immediately notify the
EIB, which will have the right to request the provision of guarantees or the amendment of the loan agreement, or the early
repayment of the loan (if a merger and demerger transaction outside the TIM Group jeopardizes the execution or operation of
the Project or is detrimental to the EIB in its capacity as creditor);
TIM has undertaken to ensure that, for the entire duration of the loan, the total financial debt of the companies belonging to
the TIM Group other than TIM, and except where such debt is fully and irrevocably guaranteed by TIM, this will be less than
35% (thirty-five per cent) of the total financial debt of the TIM Group;
“Clause for inclusion”, where, if TIM undertakes to maintain financial parameters in other loan agreements (and also certain
more stringent clauses, such as cross defaults and commitments to limit the sale of assets) that are not present or are more
stringent than those granted to the EIB, the latter will have the right to request, if it considers in its reasonable opinion that
such changes may have negative consequences on TIM’s financial capacity, the provision of guarantees or the amendment of
the loan agreement to provide for an equivalent provision in favour of the EIB.
Some contracts for outstanding loans granted to certain TIM Group companies as at June 30, 2025, contain obligations to comply
with certain financial ratios, as well as the usual other covenants, under penalty of a request for the early repayment of the loan.
Finally, as at June 30, 2025, no covenant, negative pledge or other clause relating to the aforementioned debt position had in any
way been breached or violated. nor are any difficulties in complying with the covenants expected in the near future.
TIM GROUP – ALTERNATIVE PERFORMANCE MEASURES
In addition to the conventional financial performance measures established by IFRS Accounting Standards, the TIM Group uses
certain alternative performance measures in its internal presentations (business plan) and in external presentations (to analysts
and investors) for the purposes of enabling a better understanding of the performance of its operations and its financial position.
These measures in fact represent a useful unit of measurement for assessing the operating performance of the Group (as a whole
and at Business Unit level).
Such measures, which are presented in the periodical financial reports (annual and interim), should, however, not be considered as
a substitute for those required by the IFRS Accounting Standards. As these measurements are not defined by the IFRS Accounting
Standards, their calculation may differ from the alternative indicators published by other companies. This is why comparability
between companies may be limited.
The alternative performance measures normally used are described below:
EBITDA: this measure is used by TIM as the financial target, in addition to the EBIT. These measures are calculated as follows:
Profit (loss) before tax from continuing operations
Finance expenses
Finance income
Other expense (income) from investments
Share of losses (profits) of associates and joint ventures accounted for using the equity method
EBIT – Operating profit
Impairment losses (reversals) of non-current assets
Capital losses (gains) from non-current assets
Depreciation and amortization
EBITDA – Operating profit (loss) before depreciation and amortization, capital gains (losses) and impairment reversals (losses) on non-current assets
In this document, following the NetCo disposal transaction, in order to provide a better understanding of the business’s
performance, organic economic and financial information relating to the operating performance in the first half of 2024 is
presented below, restated based on operating data. Such organic information is prepared by simulating the separation
operation of the fixed network, with the creation of the NetCo component and the consequent definition of the new TIM Group
perimeter, as it had occurred at the start of the reference period (January 1). Therefore, for all organic data the like-for-like
definition is used to highlight both organic information (Brazil Business Unit) and organic information as reconstructed above
(TIM S.p.A, Domestic Business Unit, TIM Group), simulating for the first half of 2024, the impact of the relationship between TIM
and NetCo/FiberCop, regulated by the Master Service Agreement (MSA) and recording, for the first half of 2025, the actual
accounting impact of the MSA and the Transitional Services Agreement (TSA).
Organic change and impact of non-recurring items on revenues, EBITDA and EBIT: these measures express changes
(amount and/or percentage) in Revenues, EBITDA and EBIT, excluding, where applicable, the effects of the change in the scope
of consolidation, the exchange differences and the non-recurring events and transactions. The TIM Group presents a
reconciliation between the “accounting or reported” figures and the “organic excluding the non-recurring items”.
EBITDA margin and EBIT margin: TIM believes that these margins represent useful indicator of the ability of the Group (as a
whole and at Business Unit level) to generate profits from its revenues. In fact, EBITDA margin and EBIT margin measure the
operating performance of an entity by analyzing the percentage of revenues that are converted into EBITDA and EBIT,
respectively.
Net financial debt: TIM believes that the Net Financial Debt represents an accurate indicator of its ability to meet its financial
obligations. It is represented by Gross Financial Debt less Cash and Cash Equivalents and other Financial Assets. The TIM Group
presents a table showing the amounts taken from the statement of financial position and used to calculate the Net Financial
Debt of the Group.
To provide a better representation of the true performance of Net Financial Debt, in addition to the usual indicator (renamed
“Net financial debt carrying amount”), the TIM Group reports a measure called “Adjusted net financial debt”, which neutralizes
the effects caused by the volatility of financial markets. Given that some components of the fair value measurement of
derivatives (contracts for setting the exchange and interest rate for contractual flows) and of derivatives embedded in other
financial instruments do not result in actual monetary settlement, the Adjusted net financial debt excludes these purely
accounting and non-monetary effects (including the effects of IFRS 13 – Fair Value Measurement) from the measurement of
derivatives and related financial assets/liabilities.
Net financial debt is calculated as follows:
Non-current financial liabilities
Current financial liabilities
Financial liabilities directly related to discontinued operations / held-for-sale non-current assets
Gross financial debt
Non-current financial assets
Current financial assets
Financial assets included within discontinued operations / held-for-sale non-current assets
Financial assets
C=(A – B)
Net financial debt carrying amount
Reversal of fair value measurement of derivatives and related financial liabilities/assets
E=(C + D)
Adjusted Net Financial Debt
Equity Free Cash Flow (EFCF): this financial measure represents the free cash flow available for the remuneration of own
capital, to repay debt and to cover any financial investments and payments of licenses and frequencies. In particular, the
indicator highlights the change in adjusted net financial debt without considering the impacts of payment of dividends,
changes in equity, acquisitions/disposals of equity investments, outlay for the purchase of licenses and frequencies, increases/
decreases of finance lease liabilities payable (new lease operations, renewals and/or extensions, cancellations/early
extinguishing of leases).
The Equity Free Cash Flow measure is calculated as follows:
Reduction/(Increase) in adjusted net financial debt from continuing operations
Impact for finance leases (new lease operations and/or renewals and/or extensions (-)/any terminations/early extinguishing of leases (+))
Payment of TLC licenses and for the use of frequencies
Financial impact of acquisitions and/or disposals of investments
Dividend payment and Change in Equity
Equity Free Cash Flow
Capital expenditures (net of TLC licenses): this financial measure represents the capital expenditures made net of
investments for competence relating to TLC licenses for the use of frequencies.
Operating Free Cash Flow (OFCF) and Operating Free Cash Flow (net of licenses): these financial measures represent the
cash flow available to repay the debt (including lease payables) and cover any financial investments and, in the case of OFCF,
payments of licenses and frequencies.
Operating Free Cash Flow and Operating Free Cash Flow (net of licenses) are calculated as follows:
EBITDA
Capital expenditures on an accrual basis
Change in net operating working capital (Change in inventories, Change in trade receivables and other net receivables, Change in trade
payables, Change in payables for mobile telephone licenses/spectrum, Other changes in operating receivables/payables, Change in employee
benefits, Change in operating provisions and other changes)
Operating Free Cash Flow
Payment of TLC licenses and for the use of frequencies
Operating Free Cash Flow (net of licenses)
Alternative performance measures after lease
Following the adoption of IFRS 16, the TIM Group presents the following additional alternative performance measures:
EBITDA After Lease (“EBITDA-AL”), calculated by adjusting the Organic EBITDA, net of the non-recurring items, from the
amounts connected with the accounting treatment of the lease contracts;
Adjusted Net Financial Debt After Lease, calculated by excluding from the adjusted net financial debt the net liabilities
related to the accounting treatment of lease contracts. TIM believes that the Adjusted net financial debt After Lease
represents an indicator of the ability to meet its financial obligations;
Equity Free Cash Flow After Lease, calculated by excluding from the Equity Free Cash Flow the amounts related to lease
payments. In particular, this measure is calculated as follows:
Equity Free Cash Flow
Principal share of lease payments
This measure is a useful indicator of the ability to generate Free Cash Flow.