Telecom Italia S p A : Q1 ‘20 Results

TIM GROUP

Q1 '20 Results

Accelerating deleverage and transformation

19 May 2020

Disclaimer

This presentation contains statements that constitute forward looking statements regarding the intent, belief or current expectations of future growth in the different business lines and the global business, financial results and other aspects of the activities and situation relating to the TIM Group. Such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those projected or implied in the forward looking statements as a result of various factors.

The financial results of the TIM Group are prepared in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board and endorsed by the EU (designated as "IFRS").

The accounting policies and consolidation principles adopted in the preparation of the financial results for Q1 '20 of the TIM Group are the same as those adopted in the TIM Group Annual Audited Consolidated Financial Statements as of 31 December 2019, to which reference can be made, except for the amendments to the standards issued by IASB and adopted starting from January 1, 2020. Please note that starting from January 1, 2019, the TIM Group adopted the accounting principle (IFRS 16 - Lease).

The financial results for Q1 '20 of the TIM Group are unaudited.

Alternative Performance Measures

The TIM Group, in addition to the conventional financial performance measures established by IFRS, uses certain alternative performance measures for the purposes of enabling a better understanding of the performance of operations and the financial position of the TIM Group. In particular, such alternative performance measures include: EBITDA, EBIT, Organic change and impact of non-recurring items on revenue, EBITDA and EBIT; EBITDA margin and EBIT margin and net financial debt. Moreover, following the adoption of IFRS 16, the TIM Group uses the following additional alternative performance indicators:

• EBITDA adjusted After Lease("EBITDA-AL"), calculated by adjusting the Organic EBITDA, net of non-recurring items, of the amounts related to the accounting treatment of finance lease contracts according to IFRS 16 (applied starting from 2019);
• Adjusted Net Financial Debt After Lease, calculated by excluding from the adjusted net financial debt the liabilities related to the accounting treatment of finance lease contracts according to IFRS 16 (applied starting from 2019).
  Such alternative performance measures are unaudited.

Q1 '20 Results	2

Highlights

"Operations TIMe" plan execution ongoing

What happened in Q1

KPIs

Revamp culture, organization and engagement

Domestic

Brazil

Cash generation and

deleverage

• New Remuneration schemerewarding ESG, Equity FCF, stock price performance
• Employee shareholding planfor higher engagement
• >2k early retirement - art 4in pipeline for 1H 2020
• Smart working extendedGroup-wide for over 40k employees
• Consumer mobile ARPU growing YoYandMNP record low-60%QoQ
• Fixed:on track tohalve line losses in 2020 vs. 2019
• Cost cuttingcontinues withdouble digit reduction YoY
• From volume to value, with service revenues growing 2% YoY, despite COVID
• Cost cutting accelerates, resilientEBITDA growing 8% YoY
• Developing infrastructure reaching 3.5k cities with 4G and 2.5m HH in FTTH
• Net Debt reducedby€ 923m from YE 2019 and€ 1.8bn YoY
• Working capitaloptimization continues (-296m outflow YoY)
• Equity FCF €466min Q1 '20. More disciplined commercial conduct

>2k exits in 1H vs. 1.6k in 1H '19 (2.7k FY '19)

Mobile ARPU -1%YoY

MNP +ve in March,

ZeroConsumer line lossesin April

Service Revenues

+2% YoY

EBITDA

+8% YoY

Net Debt reduced

• 923m QoQ

EqFCF +31% YoY

• 466m in Q1 '20

Q1 '20 Results	3

Highlights

TIM in the emergency: solid operations, the greatest support for the Country

People

All staff safe and well

supported

• Smart working >40kTIM Group employees
• Ad hocprocedures and equipment fortechnicians, commercial, data centers staff
• Increasedwelfare initiatives andflexibility on work time
• Agreement with unionsonholidays &expansion contract leading to savings in Q2

Business Continuity

Fully operational

networks and services, growing rural coverage

• Networksup and running at all times
• Bandwidthincrease
• 7k new cabinetsto provide broadband in more than
  1k municipalities serving
  ~1.2m additional households

Customers

Extra-care for our

customers...

• Unlimited dataon fixed and mobile customers
• Selectedfree services: voice, TIM Vision, ADSL to fiber switch
• Freemobile data on e- learningapplications
• Freeordiscounted B2B services for enterprises
• FreeG-SuiteTIM Edition

Wider Community

... and for our Country

• TIM Data Roomfor Civil Protection,workstations, toll free number
• Donationsby the TIM Foundation and employees
• Many initiatives forschools
• Digital educationinitiatives for all ("Maestri d'Italia")
• Monitoring tools foremergency services

Q1 '20 Results	4

Highlights

Ready to ride the transformational power of emergency

Fixed data traffic		Mobile data traffic		Collaboration apps traffic		Shops
	+80%			+30-40%		11x on average			% closed
									44%	29%
										24%
	March 9, lockdown started
Mar	Apr	May	Mar	Apr	May	Mar	Apr	May	Mar	Apr	May

Short term impacts

• Lower handsets/modem sales (no major EBITDA impact)

ťLower gross adds for lockdown, higher demand in rural / digital divide areas

•Lower churn

• Lower roaming volumes: positive on outbound (fixed fees), negative on inbound

•Higher demand for ICT services from enterprises

• Higher bad debt expected on SME

Moving on: a more digital Country, a cleaner environment, a better life-style

• Much higher penetration of digital services andICT-transportationsubstitution, reducing CO2 emissions
• Higher ultrabroadband penetration and overall demand for fixed, particularlyICT infrastructure and servicesboth in B2B and B2C
• Active and substantial Government supportfor digital infrastructures and services

A decade's evolution potentially happening in a few months

Q1 '20 Results	5

Highlights

Government response to Covid: € 2.7bn public funding benefiting telco sector

Expected timing

Schools

Public tender Sept '20 subject to EC approval

Assignment by YE

Vouchers

vouchers to be

started from July '20 for

low income families

From September '20 for

the rest post EC

approval

Grey areas

Public tender Sept '20 subject to EC approval

Assignment by YE

* Source: MISE

• Objective:connect 32,213 school buildings across the whole Country in 2020-2023
• Services: connectivity(100-1000 Mbps), maintenance and CRM covered by public grant
• Expected timing: tender in 2020, roll out 2021- 23Contract duration 5 years
• Objective:support families and companies in purchasing or upgrading UBB connectivity
• Voucher value: 500€ low income families, 200€ for other families,500-2,000€ for companies depending on speed (30-1000Mpbs)
• Scope and timing: new lines or speed upscale, 2020
• Objective:deploy infrastructure in selected industrial districts in "grey areas"
• Criteria: cities with higher businesses density
• Expected timing: tender in 2020, roll out2021-23

Budget

• 400m
• 1,146m
• 1,126m
• 2,672m

	Funding	Voucher	Implied
Category	value	lines
€bn
	€	m
Low income	0.3	500	0.6
families
All families	0.3	200	1.6
30 Mbps	0.1	500	0.2
companies
1 Gbps	0.4	2,000	0.2
companies
Total	1.1		2.6

Q1 '20 Results	6

Highlights

Covid 19 accelerating digital transformation and channels rationalization

Pull channels

scale-up…

…for a powerful combination with TIM's shops

Boostdigital channel

Cleanup andrationalization of push channels (Agencies and Telesales)

Refocus of Stores toCB retention management

New channelsexploration (Business-Consumer synergy; FWA dedicated installers)

TIM's shops a traditional strength

…that (temporarily) turned into a cost in the COVID lock down

+64%	(YoY)		>60% (YoY)		+60%	(YoY)
		Digital channels
TIM app fixed			AI channels
	penetration on
unique users			conversations
	mobile
+23%	(YoY)		+29% (YoY)		+100%(YoY)
		E-Recharges		E-Commerce
TIM app mobile
	(channel share		activations
unique users
	16%)		(share 20%)

	Fixed line digital sales		+12 p.p.
			growth	34%	Digitalization in
					technical support
				26%
				% Not Human
	5%	8%	9%	12% 13%14%		-18%(YoY)
Sept	Oct	Nov	Dec	Jan Feb Mar	Apr	Failures on field
		Sales	Channel share		Trouble tickets
			(m)

Q1 '20 Results	7

Highlights

Strategic initiatives/partnerships progress. Boosting ROCE remains the goal

Mobile towers

Fixed line network

Cloud services

and data centers

Develop TIM Brasil

TIM Vision

and content strategy

• Merger with Vodafone Towerseffective on 31 March 2020
• First wave of monetization: INWIT free float increased from 25% to 33% through ABB
• Second wave of monetization: exclusive negotiation with Ardian Consortium (see next slide)
• Exclusivity to KKRin negotiation with Open Fiber (dual track)
• Exclusivity toKKR to acquire c. 40% of TIM's secondary network. Due diligence on track
• Covid-19sanitary emergency showing importance and urgency of a single network in Italy. Growing political support
• Partnership withGoogle up and running
• Launch of TIM / Google / Banca Intesasmart-working platform for SMEs last April
• Carve-outof cloud business NEWCO planned by October (estimated 2024 EBITDA € 0.4bn)
• Promotingconsolidation in Brasil in partnership withTelefonica
• NDAs being signed to select a strategic partner to further expand TIM Live's fibre roll out
• TIM Vision Plus 100k activations in march only (+194% MoM), benefiting from exclusivity with Disney+ launched on 24 March
• ConsolidatingTIM Vision visibility and positionwithin the Italian market

Q1 '20 Results	8

Highlights

INWIT: further monetization; retaining joint control of INWIT with Vodafone

• Clearanceon bothpassive and active sharing on 6 March
• Merger with Vodafone Towerseffective on 31 March
• 4.3% share capital of New Inwit placedon 23 April @ €9.6 per share.Cash-in€ 0.4bn. Vodafone sold an equal # of shares
• TIM and Vodafone'sownerships reduced to 33.2% from 37.5%
• €214m extraordinary dividend cashed in by TIM on 8 April
• €42m ordinary dividend to be cashed in on 20 May
• Distribution policy going forward: >80% of net income

€ bn, after lease view	> 2
1.4	Additional	1.5
	monetization
	April '20 ABB	0.4
1	2

TIM is entering exclusive negotiations with Ardian Consortium (1)

for the sale of a minority stake in TIM's Tower HoldCo

• Ardian Consortium has been reserved a period ofexclusivityto acquire a significant minority stakeof TIM Tower HoldCo, fully controlled by TIM, which will own TIM's co-controlling stake in Inwit. The exclusivity follows the submission of a binding offerby Ardian Consortium
• TIM, together with Vodafone, will continue to exercise, through the investment vehicle,joint control with Vodafone over Inwit
• The transaction is subject to the finalisation of relevant documentation and customary approvals, which are expected to happen by the Summer

			Consortium
Full Majority		Significant
control		Minority stake

TIM TOWER

Extraordinary dividend		Debt deconsolidation		Stake disposal

HOLD CO

FREE FLOAT

Total TIM Group debt reduction from INWIT

expected to exceed €2bn vs. €1.4bn original plan

Joint control

(1) Investor consortium lead by Ardian and participated by Canson Capital Partners	Q1 '20 Results
	9

Highlights

Google partnership "up and running". Newco data centers carve out by October

TIM-Google Cloud partnership roadmap

• Partnership agreement with Googlesigned last February
• Go-to-marketactivities and roadshow:
• • Started engaging key top clients
  • Defined specific incentive scheme for salesforce
  • First quarter results in line with targets
• Training plan: ~5,000 resources in 2020
• Evolution ofData Centers infrastructureto host Google Region: works already started in Milan area
• Competence centerby Q3

TIM-GoogleCloud-Intesa Sanpaolo

• In April, TIM and Google Cloud signed apartnership with Intesa Sanpaoloaimed at launching an agile working tools package to support business continuity during Covid-19
• The offer combines TIM's connectivity services, Google
  Cloud productivity and collaboration apps and a laptop rental service offered by Intesa Sanpaolo Forvalue

Carve-outof Cloud and data center	Revenues 2024	EBITDA 2024
business by October 2020	€ 1bn	€ 0.4bn

Q1 '20 Results	10

Highlights

TIM Brasil developing both organic and inorganic initiatives as well

Inorganic opportunities

Promoting consolidation in Brasil in partnership with Telefonica

• Due-diligenceon Oi's mobile assets underway
• Deal will be accretive from year one and will not impact deleveraging at Group level

Strategic partners invited to enter TIM live's equity

• NDAs being signedto select a strategic partner to further expand TIM Live's fiber roll out
• TIM Live intends to expand its FTTx coverage both in terms of HH (from 5.6m now) and in terms of cities (from 27 now)

New sources of revenues…

New partnership with

• Firsttelco-bank partnership to develop joint financial service solutions in Brazil
• Offer to be launched by YE

Google Cloud agreement

• Big Data virtualization to bring disruptive efficiency and enable new commercial opportunities

…and smarter CAPEX to boost ROCE

Network sharing agreement with vivo

• Regulatoryapprovalin April. Antitrust technical approval obtained and final stage expected in June
• Sharing of 2G network in 50 cities as initial effort

Q1 '20 Results	11

Highlights

TIM Vision now the richest content platform in Italy: early benefits from exclusivity with Disney

KPIs increasing in March

(% volume increase vs Feb '20)

• +52%viewing hours
• +20%active users
• +81%purchases from videostore

	Customer base evolution
		+21%
		YoY		1.85m
			1.75
		1.66
1.53	1.59

• +64%buyers
• Disney+booming on new and existing customers

Q1 '19

Q2 '19

Q3 '19

Q4 '19

Q1 '20

Sport 1		Entertainment 1		TIMVISION Box

All major Italian and European soccer and other sports through

Now TV Ticket Sport,Dazn,

Eurosport Player

▪	Disney+	▪	YouTube
▪	Netflix	▪	YouTube Kids
▪	Prime Video	▪	SKY channels
▪	Chili	▪	Mediaset channels
			& catch-up TV

• Android TV Box to offer the widest range of tv, entertainment and gaming services,smart-home ready
• New interface for an improved user experience and an integrated content presentation (May 2020)

(1) Contents included in the TIMVision proprietary offer or third parties streaming services included in TIMVISION commercial offers and/or available on the TIMVision box	Q1 '20 Results
	12

Highlights

Fix the fixed: on track to halve Consumer line losses in 2020 vs. 2019

Lines losses in	Increase
Q2 '20 expected
to improve QoQ	customer

base

Target to halve

Consumer

line losses in

2020 and

Extend

footprint

and CB

Increase

UBB

penetration on footprint

Rural Areas ("White Areas")

+1.2m

(new addressable market)

7,000 new cabinets in March/May

Smart Working

New normal post COVID

Higher adoption of collaboration tools

generate B2B/B2C opportunities

Fixed Wireless Access1

1.3m

(new addressable market)

Push on the offer launched in Q4

Upgrading for a more 'digital' life

Switch from ADSL to FTTx

E-learning, Online Gaming, etc.

require higher bandwidth

stabilize by 2022

ARPU

Growth

Increase share of wallet on current CB

	Contents		Convergence & Adjacent Markets
			TV	Fisso		TIM
				Security
				TIM
				Unica		Google
			Smart		TIM
			Mobile	Nest
			Home	tag
				Mini

(1) Target 1m FWA active lines by 2022, 20% of fixed CB by 2020	Q1 '20 Results
	13

Financial Update

Q1 '20 Results	14

TIM Group

Organic debt reduction in line with previous quarters despite seasonality

Organic data (1), € m					Q1 '19		Q1 '20
Service				3,962	-6.6%	3,702
			820	+1.6%	834
Revenues
			3,152	-8.8%	2,876

						1,917	-7.5%	1,774
EBITDA						361	+8.1%	390
					1,558
						-11.1%	1,385
				Margin	44.1%		44.6%

All figures based on IFRS 16

Q1 '20 showing strong improvement in cash generation:

• Equity FCFat € 466m, +31% YoY or+€ 247m YoY (+64% YoY) net of FX impact (+€ 79m)and one offs related to Sky settlement and regulatory fines(-€216m)
• Net Debtat € 26.7bn, reduced € 923m from FY '19, or € 378m excluding FX impact (+€ 300m), one-offs(-€ 216m) and Inwit deconsolidation (+€ 461m)
• Net Debt ALat € 21.7bn, reduced € 182m from FY '19, or €352m (+103% YoY) excluding FX impact (-€ 4m), one-offs(-€ 216m) and Inwit deconsolidation (+€ 49m)

+31%

EQUITY FREE

Q1 '19Q1 '20

Equity
FCF	356	466

	Q1 '19	After Lease	28,583
	23,143
NET DEBT(2)	FY '19	21,893	27,668	-923
	Q1 '20	21,711	26,745
		Lease liabilities

Domestic Brazil

CASH-FLOW

+247

IFRS 16

+196

After

Lease

EFCF	FX &	EFCF EFCF	FX &	EFCF
	one-offs	adj.	one-offs	adj.
			(3)

(1) Excluding exchange rate fluctuations & non recurring items	Q1 '20 Results
(2) Adjusted Net Debt	15

1. One offs € 216m include Sky settlement and regulatory fines provisioned for in 2019

TIM Group

€2.3bn debt reduction achieved in 15 months (€1.6bn organic). A total of €3.8bn including additional INWIT monetization; €5.6bn adding KKR

Group Net Debt After Lease	Adjusted, €bn

Historical trend

IFRS 9/15

Inwit	Second wave
dividend	Inwit
& ABB	monetisation
	KKR

2014	15	16	17	18	19	Q1 '20	Q1 '20	Post
							Pro-forma	potential

transactions

€0.7bn debt reduction in Q2 thanks to first wave of INWIT monetization

implies

€2.3bn debt reduction achieved in c. 15 months

Additional inorganic deleverage likely to reach €3.3bn before considering TIM

Finance benefit…

…on top of organic Equity FCF

Q1 '20 Results	16

TIM Domestic

Mobile Service Revenues benefit from improved ARPU performance YoY

• MSR continue on an improving path: underlying YoY performance

-2.3% vs. -5.9% in Q4 once cleaned of Content Service Providers (CSP) revenues discontinuity (2.6p.p. drag YoY in Q1 vs 1.4p.p. in

Q4). MTR price reduction explains half of the underlying fall (1.1p.p.Mobile Revenuesdrag YoY in Q1 in line with 1.0p.p. in Q4)

Organic data, € m

• ARPU YoY performance better than Q4even before cleaning from

the CSP revenues drag (-0.3 €/month). Underlying ARPU trend	1,122
positive YoY
					-11.7%
					206	990
▪Lower sales of handsets due to the lockdown (63% of YoY delta		Equipment
		120
related to COVID 19) in addition to tail of new focus on margins
	Service
		TIM ARPU		916	-4.9%		-2.3%
				870
		(human)					Underlying MSR
		-5.0%	-4.4%	-1.3%	832	Retail	762	(-5.9% in Q4)
-8.5%	-7.7%	YoY
				-8.5%
€ / line / month			12.7ex.CSP	12.6ex.CSP
		-2.3% YoY	+1.6%YoY
12.4	12.5	12.9	12.4	12.3	84	Wholesale &	109
Other
Q1 '19	Q2	Q3	Q4	Q1 '20	Q1 '19		Q1 '20

(1) Source: intra operator database	Q1 '20 Results
	17

TIM Domestic

Mobile benefiting from flight to quality: TIM MNP balance positive in March

• MNPbalance more than halved once again in Q1 (-47k vs -114k in
  Q4 '19), with TIM still best performer among established MNOs
• Net adds(-373k vs -359k Q4) and human lines have been initially impacted by lockdown (-38% MoM in March), with improving trends in April and May
  COVID impact ~200k lines, related to lower gross adds in March
• Churnimproved vs Q4 '19 (5.3% vs 5.5% Q4) despite lockdown impact on second SIMs. Further improvement in April and May
• Kena contribution almosthalved QoQ, as most point of sales are in hopping malls closed during the lockdown

	Churn rate		Customer Base
		k, Rounded numbers
5.2%		5.4%5.5%5.3%		30,895	-373	30,522
		Not
	4.3%				9,892	10,098
				Human
						21,003	+206
						Human	20,424
							-579
Q1	Q2	Q3	Q4	Q1	Q2 E	Q4 '19		Q1 '20
'19				'20		c. 200k lower gross adds in March
						due to COVID 19

Market Mobile Number Portability			MNP - Operators balance	Lines x 1,000
-16%			-5%	1%					Positive in
-36%			YoY
	-42%		TIM				March
		3.3	3.6	3.0
2.9
2.6							-47
Market				-118	-166		-114
volumes					-260
Million lines
Q1 '19	Q2	Q3	Q4	Q1 '20	Q1 '19	Q2 '19	Q3 '19	Q4 '19	Q1 '20
			(1) Source: intra operator database				Op.1	Op.2	Op.3
									Q1 '20 Results	18

TIM Domestic

Domestic Fixed: zero consumer line losses in April, not far from zero with B2B

Wireline KPIs

	Total Accesses (1)					UBB Accesses (2)
					Lines x 1,000							Lines x 1,000
	17,217 -233	16,984
		Retail		Wholesale +ve
	9,166	8,981		in April
	-185			+359	7,338
	(+16k net adds),	6,979
		Wholesale		May in line with	3,670	+119	3,789
	8,051	8,003		April
	-48					3,309	+240	3,549
	Q4 '19				Q1 '20					Q4 '19		Q1 '20

Retail line losses	Accesses churn
	(monthly average)
	1.9%2.0%	1.6% 1.6%
	1.5%

Q1	Q2 Q3 Q4 Q1	Apr	May
'19	'20	E	E	Q1	Q2 Q3 Q4 Q1	Apr May
				'19	'20	E E

Migration to UBB continues: ~7.3m lines reached, +5% QoQ and +22% YoY, thanks to push on fiber conversion and FWA offer

Early benefits from "fix the fixed" initiatives. More in Q2: exclusive Disney offer launched on 24 March and ~7k new cabinets in rural areas opened in March/May (+1.2m HH served).

• Zero consumer line losses in April,not far from zero including business
• Strong growth in fiber net adds despite lockdown:+119k fiber net adds vs. +105k in Q4 although gross activations were affected by the lockdown while churn was still reflecting December/January/February disconnections. BB net adds continued to grow as well
• Wholesale fiber lines still above ULL losses: +240k VULA net adds vs.
  +233k in Q4 '19 (12k more than ULL losses). Total wholesale lines down 48k attributable to a slowdown on gross activations (WLR and bitstream), due to lockdown. Net balance turned positive in April and May
• Market discipline: competitors not levelling down prices in Q1. Some price increase here and there by competitors
• Churn rate at 4.8% in Q1, down 0.9pp YoY and 0.2pp QoQthanks to lower disconnections across all typology (bad debt, switch of operator, cancelation). Further strong improvement in Q2
• ARPUgrowth affected bystopping the washing machine effect, in addition to no price increases and lower revenues from activation fees

(1) On TIM infrastructure, retail VoIP excluded	Q1 '20 Results
(2) FTTx and Fixed Wireless Accesses (FWA)	19

TIM Domestic

FSR still affected by Sparkle and new, sustainable cash generation culture

Total Fixed Revenuesdown 9.7% YoY, with Equipment affected by the lockdown (-3.5% vs +18% in Q4 '19)

Fixed Service Revenues (FSR) affected by:

• Sparkle's strategy revision explaining 1.0 p.p. decline YoY (no impact on margins)
• Shift to equipment accounting for another 0.4 p.p. (different offer structure in consumer - modem now paid - and B2B - ICT related sales)
• reduced washing machine effect (lower activation fees) with cash flow strongly benefiting (lower commissions and provisioning)

Customer Satisfaction Index (CSI)1

Wireline

Mobile

+3.1%

+3.4%

Consumer

Q4 '19 May '20 YTD

Q4 '19 May '20 YTD

+4.0%

+0.5%

Business

Q4 '19 May '20 YTD

Q4 '19 May '20 YTD

Wireline Revenues

▪Retailaffected by the decision not to level up prices, which

benefitted KPIs and strongly benefited CSI, and by softer revenues in

the SME segment

Organic data € m

2,535	-9.7%
141
2,394	Service
	-10.1%

2,289
136	Equipment
2,153
-3.5%

▪National Wholesaleup 0.6% benefiting from VULA growth above
	ULL decline
▪	Sparkle's International Wholesale revenues down 8.8%, following
	strategy revision (no impact on margins)
▪	Customer Satisfaction Index improving on all segments

1,630	Retail				1,420
	-12.9%
497	National Wholesale	500
+0.6%
239	Intern. Wholesale	218
-8.8%
Q1 '19					Q1 '20

(1) Preliminary results up to May YtD'20. CSI is an established methodology based on ACSI (American Customer Satisfaction Index) developed by University of Michigan's School of Business

Q1 '20 Results	20

TIM Domestic

Cost reduction continuing: -11% YoY on cash view

OPEX reduction continued in Q1: -10.2% YoY with addressable costs down 5.6%, in line with 5.4% in Q4 (- 7.6% cash-view, in line with -7.4%)

Net of deferred costs, on a cash view, the overall

reduction reaches € 233m (-11.1% YoY)

• Interconnection: still benefiting from new strategy for Sparkle and lower regulated prices
• Equipment:strong fall both related to lower handset revenues (Covid-19 lockdown) and better equipment margins
• CoGS: increase mainly related to IT revenue growth
• Commercial: benefiting from reduced "washing machine effect", stopped CSP services, better bad debt management, alongside further efficiencies in customer care and commissioning
• Industrial: decrease in network cost (mainly delivery and assurance) and energy cost due to lower prices and consumption
• G&A: reduction in civil building
• Labour: benefiting from FTE reduction (~2.2k YoY)

OPEX

Organic data, € m							Net of
					Q1 '19		Q1 '20			deferred costs(1)
	OPEX		1,941	-10.2%
					273	(-197)	1,743	-11.1%	-233
		Interconnection		-8%
			319	252	-8%	-21
		Equipment		-40%	192	-40%	-126
					97
		CoGS		+21%	117	+22%	+22
		Commercial		391	-8%	359	-12%	-50
		Industrial		187	-7%	174	-7%	-19
					100	-6%	94
		G&A
						-7%	-12
		Labour (2)		553	-4%	531	-5%	-29
		Other (3)	20				23			+3

1. Net of deferred costs, total OPEX amounts to € 1,877m in Q1 '20 and € 2,111m in Q1 '19

(2)	Net of capitalized costs	Q1 '20 Results	21
(3)	Includes other costs/provision and other income

TIM Group

Capex under control; NWC outflow improved € 296m YoY

CAPEX

Net Operating Working Capital

Organic data, € m

586 +2.2% 599

133 +39.1%185

453 -8.6%414

+€ 52m YoYdue to different phasing per quarter vs. 2019

-€39m YoYthanks to Operation's processes optimization

		Q1 '19			Q1 '20
€ m	Non	Op.WC net		Non	Op.WC net
	Op.WC	recurring	non recurring		Op.WC recurring	non recurring
		items	items		items	items

Q1 '19	Q1 '20		Domestic		Brazil

Group recurring NWC improving €296m YoY

• Domestic improving € 141m YoY in Q1thanks to better suppliers terms and lower trade receivables more than offsetting higher inventories caused byCovid-19lockdown andone-offpayments related to 2019 provisions for Sky settlement and regulatory fines(-€216m)
• TIM Brasil improving € 145m YoY in Q1mainly due to positive FX (+€ 128m) and better cash cost management, partially offset by higher Fistel payment vs. last year(-€28m)

Group

+296

Domestic

+141

TIM Brasil

+145

Q1 '20 Results	22

TIM Group

Net Debt reduction building blocks: -€923m QoQ

• m;(-) = Cash generated, (+) = Cash absorbed, excluding call-outs

EBITDA	1,735
CAPEX	(599)			Of which:
ΔWC & Others	(348)
		Inwit deconsolidation	461
Operating FCF	788			Cash taxes	(26)

Excluding non-recurring items, FX and Inwit deconsolidation the reduction would be € 378m (vs €209m in 1Q 2019)

-923

FY '19	Operating	Financial	Cash Taxes	Dividends	Q1 '20	Lease	Q1 '20
Net Debt	FCF	Expenses	& Other Impacts	& Change	Net Debt	impact	Net Debt
					in Equity			After Lease
FY '18						Q1 '19
		+3,313
25,270	(690)	346	3,632*	25	25,583	(5,440)	23,143
Delta YoY	(98)	(51)	4,102	15	(1,838)	406*	(1,431)
				* o/w 3,553 FTA IFRS 16		* o/w 461 Inwit
								Q1 '20 Results	23

TIM Group

Liquidity margin - After Lease view

Cost of debt ~3.4%, -0.4p.p. YoY, ~0.2p.p. QoQ

Cost of debt ~3.4%

Cash & cash	Undrawn portions of		Bonds		Loans
equivalent	committed bank lines

		Liquidity Margin				Debt Maturities
																											8.3		(1)
																												24.9
																												8.3
																											2.6
																								3.5
																										2.0
																														20.5
	9.1																	3.1		3.4
																			0.2
														4.3			2.4
								Covered until 2022
			4.1								0.6
													2.1			3.1
																	1.2
				5.0						1.0			0.6
																											4.4
										0.7					1.6
											0.3
									FY				FY 2021	FY 2022	FY 2023	FY 2024	FY 2025 Beyond 2025	Total M/L
								2020
																																Term Debt

(1) € 24,881m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 624m) and current	Q1 '20 Results
financial liabilities (€ 1,476m), the gross debt figure of € 26,981m is reached	24

TIM Brasil

TIM Brasil solid execution despite s-t headwinds, with an eye on the future

Reported data, R$m

					Q1 '19		Q1 '20
Service				4,025	+1.6%	4,091
			226	+10.3%	249
Revenues				3,799	+1.1%	3,842

			1,772	+8.1%	1,916
EBITDA
			Margin 42.3%		45.5%

Solid execution despite covid-19 impact, with ongoing transition from volume to value, disruptive efficiency and cost discipline, new source of revenue and inorganic opportunities

• Service revenues1.6% YoY increase thanks to both Mobile and Fixed
• MSR+1.1% YoY thanks to improving postpaid (+3.7% YoY excluding interconnection), whilst prepaid was hit by lower # of rechargers mainly due to covid-19 social distancing measures (-4.5% YoY)
• FSR+ 10.3% YoY driven by TIM Live (ARPU +6.1% YoY, CB +20% YoY)
• EBITDA+8.1% YoY thanks to resilient topline and further efficiencies driven by digital transformation (OPEX -5.0% YoY). EBITDA margin at 45.5%, up 3.2 p.p. YoY
• Solid network development: 9 new cities covered by FTTx, totaling 27 cities(1)
  (+93% YoY). New cluster launched: Betim and Contagem

Mobile

TIM Live

Consistent Margin

ARPU +4.8% YoY

Revenues +29% YoY

EBITDA margin (Pro-forma)(3)

to 23.9 R$/month

CB +20% YoY to 584k

30.2% 32.0% 35.5%

36.5%

37.6%

PrepaidARPU +4.6% YoY

ARPU +6.1% YoY to 84.5 R$

PostpaidARPU +4.3% YoY(2)

Q1'16

Q1'17

Q1'18

Q1'19

Q1'20

1. April 2020 figures, excluding overlapping areas
2. Excluding M2M
3. Pro-formaexcludes the effects of the adoption of IFRS 9, 15 and 16

Robust Infrastructure

Leader in 4G coverage

3.5k cities, +6% YoY

Solid NGN expansion

>5.6m HH (FTTH+FTTC)

User Exp. Centric

Lowest latency

Greatest 4G availability

Up to 4x speed required for videocall app usage

Beyond the core

First telco-bank

partnership to develop

joint solutions

Q1 '20 Results	25

TIM Group

After Lease view

EBITDA After Lease

Net Debt After Lease

Group

€ m, organic	(-7.5%)	€ m, reported	Excluding non-recurring items, FX and Inwit deconsolidation
(-8.5%)			debt reduction in Q1 would be € 352m (vs €173m in 1Q 2019)

1,917	(234)	1,683	1,541	233	1,774			(182)	(923)
					27,668	(5,775)	21,893	21,711	5,034	26,745

Q1 '19	Lease
EBITDA	impact

• m, organic

Q1 '19	Q1 '20
EBITDA	EBITDA
AL	AL

Lease impact

Q1 '20
EBITDA	Net Debt	IFRS 16	Net Debt AL	Net Debt AL	IFRS 16	Net Debt
	FY '19	& IAS17	FY '19	Q1 '20	& IAS17	Q1 '20

Equity Free Cash Flow After Lease

(-11.1%)

Excluding non-recurring items and FX EFCF AL in Q1 would

(-11.6%)

€ m, reported

be €442m (vs €246m in Q1 '19)

1,558

110

(157)

1,401

1,239

146

1,385

Domestic

(13)

466

356

(148)

208

195

271

Q1 '19

Lease

Q1 '19

Q1 '20

Lease

Q1 '20

EFCF

IFRS 16

EFCF AL

EFCF AL

IFRS 16

EFCF

EBITDA

impact

EBITDA-

EBITDA-

impact

EBITDA

Q1 '19

& IAS17

Q1 '19

Q1 '20

& IAS17

Q1 '20

AL

AL

Q1 '20 Results

26

Final remarks and guidance

We are living an unprecedented periodof health emergency worldwide resulting in high uncertainty and signs of economic recession. Telcos are resilient but not immune. TIM has taken actions to react, including a plan to contain costs and increase investment efficiency

For 2020 we aim to offset revenue or EBITDA shortfall due to COVID 19 with incremental

OPEX/CAPEX efficiencies

Hence we expect to be able to preserve 2020 EBITDA - CAPEX guidanceas well as maintain2021-22guidanceand 2020-22cumulated Equity FCF

2021 deleverage guidance(<€20bn) improvesthanks to the INWIT ABB and the Ardian Consortium transaction

Q1 '20 Results	27

Q&A

Q1 '20 Results	28

Annex

Q1 '20 Results	29

TIM Group

Net Income

Reported data, € m, Rounded numbers

						Net Income
						post minorities
Inwit gain following the merger 441m
	+395m YoY

Q1 '20

	EBITDA	Non	EBITDA	Depreciation &	EBIT	Net Interest &	Taxes	Net Income	Minorities	Net Income
	Organic	recurring	Reported	Amortization		Net Income/		ante		Reported
		items		& Other		Equity/ Disc.		Minorities
						Operations
Q1 '19	1,917	29	1,946	(1,263)	683	(387)	(109)	187	(22)	165
	(143)	(68)	(211)	61	(150)	528	25	404	(9)	395

Q1 '20 Results	30

TIM Group

Liquidity margin - IFRS 16 view

Cost of debt ~3.9%*, -0.5p.p. YoY, ~0.2p.p. QoQ

Cost of debt ~3.9%

	* Including cost of all leases																						Undrawn portions of													Finance
																									Cash & cash			Bonds				Loans
																									equivalent	committed bank lines										Leases
	Liquidity Margin			Debt Maturities
																																			10.4		29.9 (1)
																																				8.3
																															3.0
																																	2.2
																																						20.5
																												4.0			2.0
																														0.6
																								3.6		3.4			0.4
																										0.2
																								2.4
9.1																	4.8				0.4
	Covered until 2022									0.6
			4.1													2.7			3.1				0.5																	4.4
																			1.2
																0.6
											1.4								0.5
				5,000
																																					5.0
																	1.6
							0.7
									0.3
											0.4				0.6
									FY 2020				FY 2021		FY 2022		FY 2023	FY 2024	FY 2025	Beyond 2025	Total M/L Term
																																												Debt
						(1) € 29,907m is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 656m) and current						Q1 '20 Results
						financial liabilities (€ 1,476m), the gross debt figure of € 32,040m is reached																						31

TIM Group

Well diversified and hedged debt

NFP		Fair value		NFP
adjusted			accounting

• Refers to positive MTM derivatives (accrued interests and exchange rate) for € 1,054m, financial receivables for lease for € 94m and other credits for € 58m

Gross Debt

Derivatives

5%

Banks & EIB

17%

Op. leases		Bonds
	62%
and long rent
15%	Other
	1%

Maturities and Risk Management

Average m/l term maturity: 8.2 years (bond 7.4 years only)

Fixed rate portionon medium-long term debt

approximately 71%

Around27% of outstanding bonds (nominal amount)

denominated inUSD and GBP and fully hedged

Q1 '20 Results	32

FromCapital Market Day 2020

In fiber: KKR chosen for a dual track approach towards one single network

We delivered on our promises

• TIM selected KKR Infrastructure
  ("KKR") as financial partner
• Dual track approach:
• • Integration with Open Fiber
  • Minority investment of KKRin
    TIM's secondary network
• Government support for a single network
• Preparatory works similarin both cases

Partnership with KKR

TIM entered an exclusivity period with KKR in response to KKR's offer to acquire a ~40%stake in FiberCop, a Newco owning TIM's entire secondary network (both fiber and copper)

FiberCop will:

• Manage TIM's secondary copper network,which is going to progressively switch to fiber (and partially to FWA) over time
• Develop fiber secondary network in Black & Grey areas
• Continue to provide copper access in areas not reached by FTTH
• Act as a wholesale operatorprovidingcopper and fiber access passive services to TIM and other OLOs
• Act as integrator of Open Fiber at the right conditions

Development of theinfrastructure will remain under TIM's control

▪Network deployment in ~1,600 cities (in Black and Grey areas)

▪Target coverage c. 13.5m HH1by 2026(i.e. >55% of total HHs1in Italy)

(1) Technical households, TIM definition (24.3m in Italy)	Q1 '20 Results
	33

FromCapital Market Day 2020

First step overview: KKR transaction financials and perimeter

• Compelling valuation, valuing TIM's secondary network (incl. both fiber and copper) € 7.5bn EV
• The transaction represents a first step towards a potential deal with Open Fiber, which would unlock potential synergies

	Enterprise value			Stake acquired
	€ 7.5bn	~40%
	Equity Value			Cash-in for TIM
	~€ 4.2bn			~€ 1.8bn

NewCo Perimeter

passive only

fiber

Backbone

fiber

Central

fiber

Cabinet

Home

Office

copper

Home

100% owned by TIM

~40% KKR

Envisaged transaction perimeter includes all of TIM's network infrastructure from

the cabinet to the home, both fiber and copper (ducts, copper and fiber secondary network, sockets, etc. with cabinet excluded)

The company will be a wholesale operator providing copper and fiber access passive onlyservices to TIM and other OLOs

Q1 '20 Results	34

For further questions please contact the IR Team

Investor Relations Contact Details

Phone	E-mail				TIM Group Website
[phone]
[e-mail]		www.telecomitalia.com
[phone]

TIM Twitter	TIM
Slideshare

www.twitter.com/TIMNewsroomwww.slideshare.net/telecomitaliacorporate

Q1 '20 Results	35