Telecom Italia (TIT) investor relations material

Executive summary

• Q1 2026 results met expectations, with group revenues up 1.4% year-over-year to €3.3 billion, driven by growth in Brazil and a slight decline in domestic operations; guidance for the full year is confirmed and strategic initiatives, including AI and digital sovereignty, are progressing.

• EBITDA fell 22.2% to €732 million, mainly due to significant non-recurring personnel and litigation costs; underlying EBITDA after lease excluding MVNO grew 4.1%.

• Net loss attributable to owners widened to €292 million from €124 million a year earlier, impacted by higher non-recurring charges and discontinued operations.

• Major capital structure actions included saving shares conversion, share capital reduction, a planned reverse stock split, and a share buyback program.

• AI initiatives are being scaled across operations, customer care, and back office to drive efficiency and service quality.

Financial highlights

• Group revenues rose 1.4% year-over-year to €3.3 billion; service revenues up 2.3% (4.1% ex. MVNO); Brazil revenues up 6.4%, domestic down 0.9%.

• EBITDA after lease was €0.8 billion, down 2.7% year-over-year; excluding MVNO, EBITDA after lease grew 4.1%.

• CapEx was €416 million (12.5% of revenues), down from €457 million in Q1 2025; domestic CapEx margin at 8.8%.

• Equity free cash flow after lease was negative €390 million, reflecting seasonal working capital effects.

• Net debt after lease stood at €7.3 billion, leverage ratio at 1.99x; available liquidity margin at €6.47 billion.

Outlook and guidance

• Full-year 2026 guidance is confirmed, with EBITDA after lease expected to accelerate in H2 as MVNO headwinds fade and AI-driven efficiencies scale.

• FY 2026 guidance: revenues up 2-3%, EBITDA after lease up 5-6%, CapEx below 14% of revenues, leverage below 1.7x.

• Price increases and cost transformation are expected to drive incremental revenue and efficiency.

• Shareholder remuneration includes dividends (70% of equity free cash flow after lease net of concession fee) and a buyback of ~50% of Sparkle disposal proceeds.

• AI-driven operational improvements are targeted to go live in H2 2027, with significant automation and efficiency gains.