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Tim, revenues up to 16.3 billion

Service revenues rise again in Italy

by Finance Review

14 February 2024

3' min read

Key points

Profitability
The four divisions

3' min read

Tim closed 2023 with revenues up 3.1% to EUR 16.3 billion and in Italy, preliminary results approved by the board of directors show, service revenues are growing again. Group EBITDA grew 5.7% to EUR 6.4 billion. "The positive trend continues, for the second year in a row with results in line with all guidance," underlines a note.

Specifically in Q4, compared to Q4 2022, total group revenues were up 1.9% to EUR 4.3bn, service revenues at EUR 4bn (+3%) with Brazil (+8.2%) and Domestic (+1.2%) returning to growth after 22 quarters. Ebitda in Q4 was up 6.8% to EUR 1.6bn, with the Domestic business unit growing for the third consecutive quarter (+5.5%) and Tim Brasil confirming its solid path (+9.5%).

Tim's Adjusted Net Financial Debt was €25,656 million at 31 December 2023, an increase of €292 million compared to 31 December 2022 (€25,364 million). Adjusted Net Financial Debt - After Lease (net of lease agreements) as of 31 December 2023 amounted to €20,349 million, an increase of €334 million compared to 31 December 2022 (€20,015 million) "as a net effect of the positive operating dynamics offset by the requirements of financial and tax management and the payment of dividends in Brazil," a note explained.

Profitability

The organic Ebitda of EUR 6.4 billion is calculated net of the non-recurring component.
Gross, the group's Ebitda in the financial year 2023 is EUR 5.710 billion (+6.8% in reported terms, +5.7% in organic terms). Non-recurring events in the financial year 2023 include: EUR 484 million for personnel costs (EUR 572 million in the financial year 2022) also related to the application of Article 4 of the Fornero Law; EUR 189 million (EUR 110 million in the financial year 2022) for charges mainly related to litigation, regulatory penalties and potential liabilities related to them, provisions for onerous contracts as well as non-recurring agreements and project development and recovery of operating costs.

The four divisions

With regard to the group's four divisions, Tim Enterprise during the twelve months, total revenues and service revenues increased by 4.6 per cent and 5.1 per cent respectively. In particular, cloud revenues exceeded 1 billion in the full year.

NetCo, i.e. Tim's fixed network, reported total revenues up 3.7% and service revenues essentially flat (-0.2%) for the twelve months. The roll-out of fibre continues in line with the target of 48% coverage by 2025.

Tim Consumer during the twelve months, total and service revenues were down 4.7% and 4.2%, with a gradually improving trend (service revenues -3.2% in Q4, -3.4% in Q3, -4.9% in Q2, -5.6% in Q1). The 'Volume to Value' strategy, with price repositioning actions applied, since the beginning of the year, to 50% of the mobile customer base and 70% of the fixed customer base, has led, the note explains, to an increase in Arpu in both fixed and mobile, with limited impact on the churn rate, which is unchanged from last year.

Tim Brasil for the twelve months, total and service revenues were up 10.7 per cent and 10.8 per cent, respectively, and EBITDA was up 14.7 per cent. The strong performance of the company, which recorded the best operating free cash flow in its history, allowed it to exceed its 2023 targets, while also significantly improving shareholder remuneration, which exceeded R$ 2.9 billion.