TIM Group

3Q 2018 ResultsNovember 9th, 2018

Amos GenishPiergiorgio Peluso

13Q’18 Results

Safe Harbour

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 and operating data have been extracted or derived,

with the exception of some data, from the TIM Group Interim

Management Report at 30 September 2018 which have been

prepared in accordance with the International Financial

Reporting Standards issued by IASB and endorsed by the EU

(IFRS) and are unaudited.

The first nine months of 2018 results include the effects arising from the

adoption, starting from 1 January 2018, of the new standards IFRS 9

(Financial Instruments) and IFRS 15 (Revenue from Contracts with

Customers). To enable the year-on-year comparison of the economic and

financial performance for the first nine months of 2018 and 3Q2018 , this

presentation shows “comparable” statement of financial position figures

and “comparable” income statement figures, prepared in accordance

with the previous accounting standards applied (IAS 39, IAS 18, IAS 11,

and relative Interpretation).

23Q’18 Results

3Q’18 Results

1

2

3

Financial Update

Closing Remarks

Highlights and Main Trends

33Q’18 Results

1.006 1.221

Organic data (1), €mln

3Q’18 Main Results

Resilient top line, cash flow growth

(1) Excluding exchange rate fluctuations & non recurring items (2) 3Q’17 Domestic Organic Ebitda excludes 28 mln € of liability reversals. This one off item impacted 2Q’17 by 39 mln € and 4Q’17 by 46 mln €. No further YoY impact from this item after 4Q’18 (3) Excluding 630 mln € GSM Licences in 3Q’17

3.553 3.518

1.821 1.764

845 872

-1.0%

Group Domestic Brazil

Stable group revenues: Italy meeting well all challenges, Brazil confirming steady growth

Stable group clean EBITDA: improvement on Domestic, positive high single-digit performance in Brazil

Strong growth in EBITDA less CAPEX

Group net debt down by more than €1bn YoY

SERVICEREVENUES

EBITDA (2)

-0.3%

+3.3%

+8.7%

EBITDA-CAPEX (3)

4.391 4.380

3Q’18 3Q’17 3Q’18 3Q’17 3Q’18

NET DEBT

3Q’17

330 357

-1.4% -3.1%2.149 2.119

1.793 -1.6%Net one offs -0.1%

26.228

25.190

3Q'17

3Q'18 -1,038

25.308

25.190

FY'17

3Q'18 -118

+21.4%+18.0%

108 161

+47.1%

Net one offs2.121

900 1.062

43Q’18 Results

3Q’18 Domestic

Domestic transformation is building value

Best in ClassCustomer Engagement

LeadershipPositioning

Agile Organization

Cash-Flow Generation

DigiTIMpillars

Consumer:Building

SustainablePremium

Main 3Q Domestic Achievements

Unlimited mobile data for value customers strengthening convergence

New consumer app (with self care messaging) Smart-life suite IoTIM Improved mobile customer journey Accelerated fiber migration

Optimized B2B sales model More-for-more business portfolio Massive adoption of cyber-security services

Business:Implementing IT Company

Model

Network simplification: decommissioning started

Keeping the pace on network automation

Intelligence: progress in big data & API exposure

Increased technician productivity

Pervasive FTTx approach

Increased digital experience in assistance

▪ +1.2m retail FTTx lines

▪ +3pp ICT / total business revenues (from ~18% to ~21%)

▪ +394k ICT clients (from 135k to 529k), 43% penetration

▪ Pilot project on 7 central offices▪ 34 IT systems shut down▪ >40 network functions virtualized▪ >100 APIs already implemented▪ +8 big data use cases

▪ Productivity: +1.8 jobs/day per technician (1)

▪ +1.1 mln wholesale FTTx lines▪ + 23% wholesale non-regulated

revenues

Operational Improvements

9M '17 9M '18

+14%

Strong growth in Domestic

EBITDA-CAPEX

Financial Results

(KPIs, D YoY)

Shaping Convergent

Digital Platform

Reinforcing Best Italian

Infrastructure

2,7253,110

(1) Completed gross jobs per day (from 3.4 to 5.2)

Commercial

Technology

Access

53Q’18 Results

3Q’18 Domestic Wireline

Improving service revenues and ARPU

2.498 2.492

2.632 2.607

3Q'17 3Q'18

Wireline Revenues

Service

Organic data, € mln

33,4 35,5+6.3% YoY

+11.8% YoY

Consumer

Broadband

ARPU

Positive ARPU effect from repricing(1), while more-for-more approach limits churn

Premium Position

Consumer

Business

Launched new IoT app and services (e.g. TIM Security, Smart Home,iHealth)

IoTIM

~1.6mln customers.New partners: Amazon and Dazn, addingto Netflix

TIM vision

€ / line / month

ICT

Modular approach on ICT value-added services. Penetration on total business customer base materially increased

Cloud & IT services revenues growing 12% YoY

9%

42%29%

43%

3Q'17 3Q'18

Enterprise

SME

Wholesale

National

Double-digit growth YoY of non-regulated service revenues

Drag on revenues worth 41 mln €, with limited impact on EBITDA (-4 mln €). Sparkle is evolving from voice to data, and is a sound low-margin business, where scale is key

International

24,5 27,4

Equipment

Retail

Core Service (2)

(1) July repricing of 1.95 euro/month (net of VAT) on about 8 million lines(2) Includes Domestic Wholesale and excludes Sparkle

2.183 2.211

1.663 1.682

Wireline Domestic -0,9%

-0,3%

+1.1%

+1.3%

63Q’18 Results

3Q’18 Domestic Wireline

Healthy FTTx conversion continues

(1) Retail VoIP included(2) VoIP excluded

Multi-play customers increased > 40% of

consumer broadband base

Retail and wholesale customers are migrating to fiber and FTTx adoption is growing:

▪ +12% customers upgraded to FTTx (QoQ)▪ +2.3m total FTTx lines YoY, o/w +1.2m retail

Internet up to 1000 Mbps

Modem included

TIM VISION

Unlimited calls

Unlimited ITZ Voice F2F (EU and North America)

Mobile: 1000 minutes and 5 Giga

TIM Connect Black

24%40%

3Q'17 3Q'18

+16 p.p. YoY retail FTTxpenetration on total

broadband customer base

Accesses (1)

Total Accesseson TIM

Infrastructure

Broadband FTTx

WHOLESALE

RETAIL

Line losses continued to be impacted

by repricing, increase in competitive

intensity and voice-only erosion

Line Losses

11.203 11.102

8.078 8.114

19.281 19.216

2Q'18 3Q'18

-65

+36

-101

7.547 7.561

7.505 7.553

15.052 15.114

2Q'18 3Q'18

+62

+48

+14 2.776 2.990

1.617 1.924

4.3934.914

2Q'18 3Q'18

+521 (+12%)

+307

+214

-200 -195

3Q’182Q’18

(2)

73Q’18 Results

3Q’18 Domestic Mobile

Limited revenue impact from a complex quarter

TIM 100% F-M package: 600k activations to-date

TIM Party loyalty program: 1.5 mlnsigned-up (~350k convergent) since launch in June. Unlimited data forF-M customers

Loyalty & Convergence

Consumer

Upgraded customer app providing new services (e.g. TIM Pay) and access to customer care via messaging

TIM PERSONAL

Business

Portfolio

Offers simplification and more-for-more approach and relevant win-back deals on enterprise customers

1.202 1.169

132 159

1.334 1.328

3Q'17 3Q'18

Service

Organic data, € mln

Handsets

-2.8%

+20.7%

flat

€ / line / month

16,4 16,0

3Q'17 3Q'18

Mobile ARPU(on human SIMs)

-2.0%

Mobile Revenues

Solid Performance

Stable service revenues YoY with slight improvement QoQ.

Positive 3Q MNP results

83Q’18 Results

3Q’18 Domestic Mobile

New entrant effects minimized through proactive commercial approach

€ Mln, organic data Customer Base

k, Rounded numbers

k, Rounded numbers

Total

o/w Active

o/w LTE

Human

31.629 31.994

23.132 22.738

19.621 19.299

10.424 10.417

2Q'18 3Q'18

+1,2%

78%penetrationon mobile

broadband CB

-1.6%

-1,7%

Mobile Number Portability Trend (1)

(1) TIM+Kena

2-Tier strategy paying-off

-350

-250

-150

-50

Jul Aug Sep Oct 3Q’18

0

YTD

Loyalty &Convergence

Core long term positioning on high value,

diving convergence

2nd Brand segmented approach

Resilient MNPwith reducing contribution

to new entrant

TIM share of ports-out to Iliad: ~20% in September, reduced from ~24% in June, both well below TIM’s market share

Further improvement in October

93Q’18 Results

1.009 904

3Q’18 TIM Brasil

Steady growth in top line and EBITDA Organic Performance, R$mln, Rounded numbers

503 740

Double-digit mobile and fixed ultra broadband ARPU growth

EBITDA double-digit trend confirmed on a 9M basis

Ongoing efficiency supported EBITDA margin expansion

Optimized CAPEX in 3Q’18 and strong EBITDA – CAPEX performance

Strong operational metrics and UBB coverage expansion confirmed: FTTH launched in 5 cities in 3Q’18

Improved consumer sentiment expected after elections

Merger between TIM Celular and TIM S.A. will generate relevant operational and financial synergies, and unlock ~R$1bn in tax loss carry-forward from 2018

REVENUES

EBITDA

EBITDA-CAPEX

3Q’183Q’17

+8.7%1.512 1.644

+47.1%

3.905 4.033

+4.4%

+3.3%

4,083 4,261Total

Service

Mobile Service Revenues

TIM Live Revenues

CAPEX -10.4%

KPIs

Mobile ARPUR$ 22.6+10.3%

YoY

12 MonthsPostpaid Net

Adds +2.9 Mln(CB: 19.6 Mln)

TIM Live ARPUR$ 77.5+10.4%

YoY

12 MonthsFixed UBB Net

Adds +73k(CB: 449k)

700 Mhz Cities1,172+256

vs YE’17

FTTH1 HH+761k

vs YE’17

R$ 3.8 Bln+2.9 % YoY

R$ 0.10 Bln+35.7% YoY

(1) Addressable households ready to sell

103Q’18 Results

Focus on 5G

5G will redefine competitive landscape, strengthening TIM position

5G spectrum leadership further enables seamless experience of TIM ultra broadband access-agnostic service all-over Italy

Spectrum Leadership

700MHz 10MHz

3.7GHz 80MHz

26GHz 200MHz

• 4x the bandwidth of Wind and Iliad in 3.7GHz

• Capability to stimulate/cope with future traffic growth

• Best suited for smart industry 4.0 and FWA services

• “Deep indoor” and strong mobile broadband QoS in rural areas

• Strong positioning on automotive and public safety verticals

Lower Costs, Higher Quality,New Services

• Lower industrial cost of data traffic

• Superior throughput, low latency and improved capacity (n. of served devices x square km)

• Enhanced mobile broadband to differentiate retail offer

• Competitive advantage in new verticalsfor industrial automation

• 5G pilots in 4 cities, 55 partners, 70 use cases

Enhanced Ultra Broadband Access

• FTTH complemented with 5G FWA on 3.7GHz and 26GHz where convenient

• FTTC complemented or improved - hybridized with 3.7GHz 5G FWA

• 700MHz to provide high-speed performances everywhere

FWA @ 3.7Ghz also from already existing mobile macro sites (~20k)

Multi-technology ultra broadband coverage of Italy

113Q’18 Results

3Q’18 Results

1

2

3

Financial Update

Closing Remarks

Highlights and Main Trends

123Q’18 Results

Organic data, €mln, Δ YoY

(1) Associated to sales of receivables(2) Capitalized costs are essentially those associated with delivery and activation of fixed lines, with directly related IT and Network costs, which are smoothed on an average 5-yr basis(3) 3Q’17 Organic Domestic Opex is changed to €2,028 mln (€1,999 mln plus €28 mln of liability reversals)

Sales-related costs up YoY, supporting commercial performance in a very competitive environment. Caring cost sub-cluster showing some improvement

Industrial flat YoY, supported by lower energy costs

Rigorous cost discipline and zero-base approach on G&A and IT, also supported by YtD real estate space reduction of 380k sqm

Labor cost savings driven by FTE reduction of 3.2% YoY (down 1,464 YoY; domestic workforce 3Q18 44,260 vs 45,724 3Q17)

Other costs flat YoY excluding one-offs

3Q’18 Domestic

OPEX: stable YoY trend despite increased commercial activity

3Q17 3Q18

Addressable Cost Base 1,677 flat 1,680

Commercial and Caring 705 4.4% 736

Industrial 266 flat 268

G&A, IT 127 -9.4% 115

Labor 580 -3.3% 561

Other 350 -1 349

Interconnection 410 -30 380

Credit Cost (1) 23 26 49

Bad Debt & Other 30 -11 19

Capitalized Cost & Other (2) -113 13 -100

Total Opex 2,028 flat 2,029(3)

133Q’18 Results

9/'17 9/'18 9/'17 9/'18

Traffic Growth

Mobile Fixed

+46% +45%

97%>98%

70% ~80%

9/'17 9/'18

Coverage

LTE

FTTx

▪ Ultra broadband coverage extended in line with Plan

▪ Fixed access YoY reduction derived from having reached ~80% FTTx coverage, which will now continue in synergy with 5G (FWA)

▪ 4G access reduction will be rebalanced by up-and-coming VRAN technology and 5G roll-out

▪ Heavy traffic growth fully supported

▪ Procurement transformation in progress: number of suppliers and unitary costs reduced

9M’18 Domestic

Capital intensity reduced, ultra broadband coverage improved

222 211

298 193

895

420

726

701

379

413

9M'17 9M'18

-572-22.5%

34

-25

-475

-105

-12

2,547(1)

1,975

Mobile access

Fixed access

Capacity, run and maintain

CPE & success based

OtherIT

(1) Net of € 630 million License capex in 3Q’17

Organic data, €mln, Δ YoY

CAPEX/sales 22.5% 17.5%-5.0p.p.

143Q’18 Results

9M’18 TIM Group

Operating free cash flow generation

(1) - € 407 mln excluding GSM Licence(2) + € 41 mln excl. Brazilian Spectrum

Reported, €mln

Group

998 1.457

(1,334) (2,000)

2.332

3.457

EBITDA-CAPEX

DOWC

OpFCF

+1,125

-666

+459

9M’17 9M’18

Brazil

(86) 176

(552) (310)

466 486

9M’17 9M’18

+20

+242

+262(2)

EBITDA-CAPEX

DOWC

OpFCF

1.083 1.306

(795) (1,677)

1.878

2.983

9M’17 9M’18

+1,105

-882

+223(1)

Domestic

DOWC

OpFCF

EBITDA-CAPEX

Δ operating working capital differences driven by:

▪ Roll-down effect of cash costs: 0.4bn €

▪ VAT change-in-law impact (split payment): 0.3bn €

▪ Early retirement cash-out and other: 0.2bn €

Most of these impacts are specific of 2018 only

153Q’18 Results

OtherImpacts

NFPFY17

NFP9M18

NFP1H18

Op.FCF Dividends & Change in

Equity

Op.FCFFinancial Expenses & Cash Taxes

Financial Expenses & Cash Taxes

OtherImpacts

NFP9M’17

9M’18 TIM Group

Net financial position* has been reduced from 3Q’17 and YE’17

+49

€mln; (-) = Cash generated, (+) = Cash absorbed, excluding call-outs

-1,038

-118

*Adjusted for mark-to-market of hedging derivatives

163Q’18 Results* TIM also has band in 3400-3600 MHz, as well as Linkem, Aria/Tiscali and other operators (Go Internet, Mandarin, Brennercom, Eolo). For Fastweb, Aria/Tiscali spectrum

acquisition is not considered

Best in class allocation in 3.6-3.8 GHz available from 2018, without material cash-out impact in plan horizon

Focus on 5G

5G auction payments are back-end loaded in 2022, and will not increase group net financial position until cash-out occurs

5G licences will expire in 2037, 2100MHz will expire in 2021, all other licences will expire in 2029

Vodafone

Wind/3

Iliad

Fastweb

800

LTE

1800

GSM/LTE

2100

UMTS

900

GSM/UMTS

1450

Band “L” (SDL)

3600-3800*

5G

700 26000

2x10 80 200 2x10 20 2x202x10 2x15 5

2x10 200 2x10 20 2x202x10 2x15 5

200 2x10 2x202x10 2x20 10

2x10 200 2x102x5 2x10

200

2600

LTE

2x15

2x15

2x20

2x10

30

80

20

20

MHz TOTAL MHz

EXCLUDING 26GHz

265

265

220

110

20212018 2019 2020TIM

Schedule of payments

477€ 18€ 110€

TOTAL investment in 5G

2,399€ 55€

680,2 million in 700 MHz1,686 million in 3.6-3.8 GHz

33 million in 26 GHz

mln

Only 606 mln € spend in the next three years

2022

1,738€

173Q’18 Results

Bonds Loans (of which long-term rent, financial and operating lease payable € 2,104)

Undrawn portions ofcommitted bank lines

Cash & cash equivalent

(1) € 28,421 mln is the nominal amount of outstanding medium-long term debt. By adding the balance of IAS adjustments and reverse fair value valuations (€ 766 mln) and current financial liabilities (€ 814 mln), the gross debt figure of € 30,001 mln is reached

(2) In June, July and October TIM signed € 1.4 bln of bilateral loans at an average term of 3.5 years

(1)

TIM Group

Actively managing refinancing needs to keep a strong liquidity margin€mln

6491.449

5411.494

733

343

1.657

6.8665,000582

2.447

1.267

564

3.087

2.422

11.186

21.555

3.603

8.603

1.231

3.896

1.8082.058

3.820

2.765

12,843 28.421

Liquidity margin Within 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Beyond 2023 Total M/L TermDebt

Liquidity margin improved by € 500 Mln QoQ, supported by new bilateral loans(2) at a cost below TIM secondary market bond yields, covering any cash requirement from debt renewals until 2021

Debt Maturities

LiquidityMargin

183Q’18 Results

3Q’18 Results

1

2

3

Financial Update

Closing Remarks

Highlights and Main Trends

193Q’18 Results

Closing remarks

The Company remains committed to the strategic priorities of its plan, which will be reviewed and enhanced

3Q’18 operational achievements:

▪ Domestic transformation leads to strong operational KPIs in a challenging context

▪ Resilient performance in Italy, growth confirmed in Brazil

5G auction financial undertakings will be met with the firmest determination to deleverage:

▪ Debt reduction remains an utmost priority, driven by organic performance, and further supported by the disposals of Persidera and Sparkle

203Q’18 Results

Annex

213Q’18 Results

Organic data(1), €mln, % YoY

~48%~28%

~12%

~8%

~3%

68%

32%

By Technology By Business Segment

5%

95%

Fixed+11.5%

Mobile+2.9%

Domestic Brazil

Consumer-1.3%

Business+0.5%

Nat. WHS+5.6%

Inwit/others+4.3%

By Technology

▪ Mobile: despite slower prepaid and postpaid due to macro, growth confirmed

▪ Fixed: TIM Live double-digit performance continues. FTTH launched in 5 cities.

(1) Excluding exchange rate impact and non-recurring items(2) Net of eliminations

Group

Total Service Revenues (2)

4,380 -0.3%

Domestic

3,518 -1.0%

Brazil

872 +3.3%

Sparkle-11.7%

▪ Mobile: Service revenues impact from Iliad entry remained limited. Competitive pressure trended better at the end of the quarter.

▪ Fixed: Retail service revenues up +1.1%.

▪ Business: continued revenue growth, steady customer base

▪ Consumer: impacted by competitive dynamics and still affected by 28-day billing reversal.

▪ National Wholesale: more fiber and growth of non-regulated revenues

▪ Sparkle: reduction on low-margin business; impact on Ebitda limited to -4 mln € YoY

▪ Inwit: continued organic growth

Fixed -0.3%

Mobile -2.8%

-4%Other &

Eliminations

3Q’18 TIM Group

Service revenues breakdown

223Q’18 Results

TIM Domestic

Ultra broadband network

▪ ~113 k cabinets passed

▪ ~366 k FTTH OTB installed

▪ ~19.4 mln HH passed FTTC

▪ 2,511 cities with commercial active service, o/w:

▪ 2,395 cities FTTC

▪ 116 cities FTTH/FTTC

▪ >19.7k LTE nodes

▪ 7,367 cities LTE with commercial active service, o/w:

▪ 1,524 with 4Gplus

▪ 12 cities with 4.5G

Fixed UBB

42%

~60%

77% 78,3% 79,8% ~80%

2015 2016 2017 1Q'18 2Q'18 3Q'18

88%

>96%>98% >98%

2015 2016 2017 1Q'18 2Q'18 3Q'18

% FTTC passed % LTE passed

Mobile UBB

233Q’18 Results

Average m/l term maturity: 7.67 years (bond only 7.78 years)

Fixed rate portion on gross debt approximately 70.3%

Around 31% of outstanding bonds (nominal amount) denominated in USD

and GBP and is fully hedged

Cost of debt: ~4.4 %

Gross debt 30,001

Financial Assets (4,811)of which C&CE and marketable securities (3,603)

- C & CE (2,543)

- Marketable securities (1,060)

- Government Securities (551)

- Other (509)

Net financial position 25,190

Maturities and Risk Management

N.B. The figures are net of the adjustment due to the fair value measurement of derivatives and related financial liabilities/assets, as follows: - the impact on Gross Financial Debt is equal to 1,489 €/mln (of which 169 €/mln on bonds);- the impact on Financial Assets is equal to 552 €/mln.

Therefore, the Net Financial Indebtedness is adjusted by 937 €/mln

N.B. The difference between total financial assets (€ 4,811 mln) and C&CE and marketable securities (€ 3,603 mln) is equal to € 1,208 mln and refers to positive MTM derivatives (accrued interests and exchange rate) for € 909 mln, financial receivables for lease for € 90 mln, deposits beyond 3 months for € 1 mln and other credits for € 208 mln.

TIM Group

Well diversified and hedged debt€mln

Banks & EIB5,365Other

704

Op. leases and long rent2,141

Bonds21,791

17,9%

72,6%

2,4%7,1%

243Q’18 Results

As from January 1, 2018, IFRS 9 (Financial Instruments)and IFRS 15 (Revenues from Contracts withCustomers) have to be applied. In order to allowcomparison of the results for 3Q’18 with those for thesame period of the previous year, financial statementsdata are also prepared under previous accountingprinciples.

IFRS 9 impacts the determination of expected losseson trade receivables and other financial assets(change from the incurred loss model provided by IAS39 to the expected credit loss model).

IFRS 15 impacts the revenue recognition of fixed andmobile offerings as well as the recognition of relevantcontractual costs, without any impacts on cash flows.

TIM Group

IFRS 9-15 impactsReported data, € mln, Rounded numbers

(1) The ongoing refinements, also on supporting IT systems, related to the process of implementation of the new accounting standards, together with the high number of new commercial offers in recent months, have led - in the financial statements of the first nine months of 2018 - for some specific contractual cases within the fixed and mobile sectors, to the recalculation of the temporal distribution of revenues during the year.

Revenues Services Revenues EBITDA

9M '18 old

IFRS

D IFRS

15

9M '18 new

IFRS

9M '18 old

IFRS

D IFRS

15

9M '18

new IFRS

9M '18 old

IFRS

D IFRS

9 - 15

9M '18

new IFRS

TIM Group 14,217 (140) 14,077 13,165 (140) 13,025 6,030 (252) 5,778

Domestic 11,311 (129) 11,182 10,397 (141) 10,256 4,958 (219) 4,739

Brazil 2,929 (11) 2,918 2,791 1 2,792 1,084 (34) 1,050

(1)