Telecom Italia S.p.A. - ADR (Representing 10 Ordinary Shares)

Execution + full-year confidence (good): - CEO emphasized “execution” across operating performance, capital structure, and shareholder value creation. - Q2 results in line with expectations → TIM confirms full-year 2026 guidance. - Underlying momentum improves: group EBITDA after lease moved from -2.7% YoY in Q1 to +4.5% in Q2; underlying group EBITDA after lease grew >9% YoY in Q2 (vs +4.5% in Q1).

Reported vs underlying performance impacted by MVNO transition (surprising/negative but explained): - First half reported revenues down vs underlying due to a temporary MVNO transition headwind: - ~€80m revenue reduction in 1H (vs last year) - ~€84m EBITDA after lease reduction in 1H (vs last year) - Excluding MVNO, underlying growth is stronger: group revenues +3.3% and underlying EBITDA after lease +6.3% in 1H. - Key takeaway: the company argues the business health is better than reported figures suggest.

Cash generation & balance sheet stability (good): - Equity free cash flow (1H): ~€0.7bn positive, driven by collection of the 1998 concession fee reimbursement. - Net debt after lease: €7.3bn, leverage ~1.94x (stable vs prior quarter). - Q2 cash flow was boosted by concession fee collection (~just under €1.0bn) → working capital positive contribution of €660m. - CFO noted energy cost hedging reduces volatility risk: ~80% hedged for 2026, ~50% for 2027.