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Telecom Italia (TIIAY) Upgraded to Buy: What Does It Mean for the Stock?
ZACKS· 2025-10-02 17:01
Telecom Italia (TIIAY) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). An upward trend in earnings estimates -- one of the most powerful forces impacting stock prices -- has triggered this rating change.A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.The power of a changi ...
3 Top Communication Stocks Likely to Beat Industry Odds
ZACKS· 2025-09-05 14:16
Industry Overview - The Zacks Diversified Communication Services industry is facing challenges such as high capital expenditures for 5G infrastructure, unpredictable raw material prices, supply-chain disruptions due to geopolitical tensions, and high customer inventory levels [1] - The industry is expected to benefit from accelerated 5G rollout and increased fiber densification in the long run [1] Current Market Conditions - Companies like Telenor ASA, Telecom Italia S.p.A., and VEON Ltd. are likely to benefit from increased demand for scalable infrastructure due to the proliferation of IoT and the transition to cloud networks [2] - Demand for traditional telephony services is declining as customers switch to lower-priced alternatives and migrate to IP-based services, exacerbated by ongoing geopolitical tensions [4] Strategic Focus - Companies are focusing on providing customized support services to small and mid-sized businesses (SMBs) to improve profitability and adapt to technology advancements [5] - The industry is also offering free services to low-income families and enhancing wireless connectivity to address operating risks [5] Supply Chain and Cost Challenges - The industry continues to face a shortage of chips and high raw material prices due to inflation and economic sanctions, impacting production costs and schedules [6] - Extended lead times for basic components are likely to further escalate production costs and affect profitability [6] Profitability Outlook - The growth of video and bandwidth-intensive applications has led to significant investments in LTE, broadband, and fiber, although these investments have compromised short-term profitability [7] - The industry is transforming from traditional telecommunications firms to technology-driven companies to meet growing demand [7] Industry Performance - The Zacks Diversified Communication Services industry ranks 184, placing it in the bottom 25% of over 250 Zacks industries, indicating bearish near-term prospects [8][9] - The industry has underperformed compared to the S&P 500 and the broader Zacks Utilities sector, with a meager growth of 0.7% over the past year compared to 21.1% and 6.3% respectively [10] Valuation Metrics - The industry is currently trading at a trailing 12-month EV/EBITDA of 11.93X, below the S&P 500's 17.79X and the sector's 14.98X [13] Company Highlights - **Telenor ASA**: Recently completed a $15 billion merger with Axiata Group, with a current-year earnings estimate revised upward by 14.1% to $0.89 per share, and a stock gain of 34.2% in the past year [16] - **Telecom Italia**: Achieved a 101% stock gain in the past year, with current-year earnings estimate revised upward by 188.9% to $0.08 per share [17] - **VEON Ltd.**: Stock gained 112.6% in the past year, with current-year earnings estimate revised upward by 112% since June 2025 [21]
Is Telecom Italia (TIIAY) Stock Outpacing Its Utilities Peers This Year?
ZACKS· 2025-07-31 14:40
Grupo Televisa (TV) is another Utilities stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 67.3%. Over the past three months, Grupo Televisa's consensus EPS estimate for the current year has increased 147.6%. The stock currently has a Zacks Rank #2 (Buy). Looking more specifically, Telecom Italia belongs to the Diversified Communication Services industry, a group that includes 19 individual stocks and currently sits at #24 in the Zacks Industry ...
Telecom Italia: After Deleveraging, The Focus Is On Shareholder Remuneration
Seeking Alpha· 2025-02-28 13:44
Company Overview - Telecom Italia operates in Italy and Brazil, providing fixed, mobile, and data services under the TIM brand [1] - The company is primarily listed on the Italian Stock Exchange [1] Investment Philosophy - The investment philosophy focuses on identifying opportunities with a compelling margin of safety and an asymmetric risk-reward profile [1] - The approach emphasizes meticulous analysis of companies to uncover those with sound fundamentals and attractive valuations [1] Experience and Sector Focus - The individual has over 15 years of experience in the financial sector, with a university degree in business management and economics [1] - The investment strategy maintains a broad perspective across diverse industries, while avoiding complexities in banking, specialized IT, and biotech sectors [1] Investment Decision Process - Investment decisions are guided by a disciplined approach to value investing, emphasizing thorough due diligence [1] - This includes scrutinizing financial statements, assessing management quality, and evaluating competitive positioning within the industry [1]
TIM(TIIAY) - 2024 Q4 - Earnings Call Presentation
2025-02-13 17:51
FY 2024 Performance Highlights - TIM Group achieved its FY 2024 guidance, marking three consecutive years of meeting targets[6] - The Group's domestic revenues reached €14.5 billion, showing a 3.1% increase, with service revenues growing by 3.4%[16] - Group EBITDA After Lease increased by 10.1% to €3.7 billion, while domestic EBITDA After Lease grew by 8.5% to €2.0 billion[16] - The Group's adjusted net debt after lease decreased to €7.3 billion, resulting in a leverage ratio of less than 2.0x, including the INWIT residual stake disposal[16] - TIM Brasil's mobile customer base increased to 31.4 million lines[19] Strategic Plan 2025-2027 - TIM Group plans to invest €6 billion in 2025-2027 to strengthen its leadership in 5G, Cloud, and IoT[36] - TIM Enterprise aims to increase its ICT revenue mix from 64% in 2024 to over 70% by 2027[50] - TIM Brasil targets service revenue growth of approximately 5% CAGR and EBITDA growth of 6-8% CAGR until 2027[55] - The Group anticipates generating approximately €2.5 billion in Equity Free Cash Flow After Lease cumulatively from 2025 to 2027[62] - TIM plans to restore ordinary shareholder remuneration starting from fiscal year 2026, with cash-out in 2027, and an extraordinary remuneration post Sparkle closing[62]
TIM(TIIAY) - 2024 Q3 - Earnings Call Transcript
2024-11-15 20:37
Financial Data and Key Metrics Changes - Group revenues increased by 3.4% and EBITDA after lease rose by 11% [4] - CapEx was €1.3 billion, representing 12.5% of revenues, with EBITDA after lease minus CapEx at €1.4 billion, up 35% [4] - Net debt after lease reduced by over €100 million in Q3, landing just below €8 billion [4][28] Business Line Data and Key Metrics Changes - Domestic revenues increased by 1.8% and EBITDA after lease was up 8.3% [5] - TIM Consumer's top line remained flat, with wireline ARPU growing by 8% and mobile ARPU down year-on-year but improved sequentially [11][12] - TIM Enterprise reported total revenues increased by 6% and service revenue by 8%, with a significant acceleration in Q3 [17] Market Data and Key Metrics Changes - The wireline market remains stable, but there is increasing pressure from energy players [9] - The mobile market is competitive, particularly on the low end, but the top end is showing more rational behavior [10] - TIM Brasil is outperforming peers in terms of EBITDA and cash flow margin, demonstrating strong operational efficiency [22] Company Strategy and Development Direction - The company aims to grow in IT while protecting the connectivity business, which currently contributes to 50% of total revenues [15] - The strategy includes bundling services with content to enhance customer retention and increase ARPU [36] - The focus is on maximizing cash generation and shareholder value, with plans for further improvement in operational efficiency [32][27] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the complexity of the current year due to NetCo separation but remains optimistic about Q4 performance [9] - The company expects to see a significant reduction in net debt in Q4, driven by favorable seasonality [28] - There is a positive outlook for cloud services, with strong growth anticipated due to the National Strategic Hub [18][92] Other Important Information - The company has achieved approximately €170 million in savings in terms of EBITDA after lease minus CapEx, equivalent to almost 80% of the full-year target [26] - The company is exploring partnerships in the energy sector to offer bundled services [35] Q&A Session Summary Question: Domestic competition and partnerships with energy providers - Management confirmed interest in partnerships with energy providers and emphasized the importance of bundling services to enhance competitiveness [35][36] Question: Update on the agreement with Open Fiber - Management highlighted the exclusivity in areas covered by FiberCop and the ability to use Open Fiber in black areas without limitations [41][42] Question: Capital allocation and structure optimization - Management stated that further details on capital allocation and structure optimization will be provided in the upcoming plan presentation [43][44] Question: Update on concession fees and discussions with the government - Management provided an update on the appeal process regarding concession fees and the expected timeline for a decision [55][56] Question: Flexibility in commercial approach post-NetCo sale - Management confirmed increased flexibility in commercial strategies, particularly in bundling offers [62] Question: Enterprise contract growth and margin implications - Management indicated that the growth in enterprise contracts is expected to be accretive, with a focus on maintaining margins [86]
TIM(TIIAY) - 2024 Q2 - Earnings Call Transcript
2024-08-04 13:33
Financial Data and Key Metrics Changes - Group net debt after lease was reported at EUR 21.5 billion before the NetCo disposal, which was reduced to EUR 8.1 billion post-disposal, achieving a net deleverage of EUR 13.8 billion [6][24]. - Group revenues grew by 3.5% year-over-year, with domestic revenues increasing by 1.6% year-over-year, accelerating from 0.5% in Q1 to 2.7% in Q2 [13]. - Group EBITDA after lease increased by double digits, with Brazilian operations exceeding expectations and domestic EBITDA aligning with guidance [13][22]. Business Line Data and Key Metrics Changes - TIM Consumer's strategy focused on stabilizing the top line by increasing ARPU while controlling churn, with fixed ARPU increasing significantly due to price adjustments [16]. - TIM Enterprise reported a 5% year-over-year increase in total revenues and over 6% in service revenue, with cloud revenues growing nearly 20% [17][18]. - TIM Brazil's service revenues rose over 7% year-over-year, driven by mobile postpaid growth, with EBITDA growing by 10% [19]. Market Data and Key Metrics Changes - The competitive environment in Italy showed signs of rationalization among major players, with aggressive pricing from new entrants, particularly in the energy sector [37]. - The cloud market is expected to see TIM's cloud revenues surpass connectivity revenues by the end of 2024, indicating a significant shift in business focus [56]. Company Strategy and Development Direction - The completion of the NetCo sale marks a new chapter for TIM, allowing the company to focus on sustainable business models and resource allocation towards growth in Italy and Brazil [12]. - The company aims to leverage its infrastructure and cloud capabilities to enhance competitiveness in both consumer and enterprise markets [42]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance, citing positive drivers and favorable seasonality for the second half of the year [3][15]. - The company anticipates a positive net cash flow of approximately EUR 0.6 billion in the second half, supporting its leverage and net debt targets [8][26]. Other Important Information - The Master Service Agreement (MSA) between TIM and NetCo allows for service provision without minimum purchase commitments, enhancing operational flexibility [10][11]. - The company has a strong liquidity position post-NetCo disposal, with a significant portion of cash now available for operational needs [47]. Q&A Session Summary Question: Concerns about debt progression and currency depreciation - Management addressed concerns about potential risks from the depreciation of the Brazilian currency, indicating that hedging strategies are in place to mitigate impacts on equity free cash flow [33]. Question: Internal reorganization plans - Management confirmed that there are no immediate plans to create separate management teams for TIM Enterprise and Consumer, maintaining current structures for the time being [28][29]. Question: Outsourcing of call centers - The company is currently focusing on internalizing call center operations rather than outsourcing, aiming for cost savings through increased productivity [30]. Question: Competitive environment in Italy - Management noted signs of rationalization among competitors and discussed plans for further price adjustments in the second half of the year [37][41]. Question: Plans for enterprise business and potential asset disposals - Management indicated that while evaluating opportunities for growth, there are no immediate plans for significant asset disposals, including in the enterprise sector [64].
TIM(TIIAY) - 2019 Q3 - Earnings Call Transcript
2019-11-10 07:41
Financial Data and Key Metrics Changes - The company achieved a debt reduction of almost €1 billion, reaching record levels in the first nine months, which is entirely organic [15][33][57] - Equity free cash flow in the first nine months is six times higher than the previous year, with €1.2 billion generated, including €444 million in Q3 [15][34] - Service revenues decreased by 4% year-on-year, while EBITDA fell by 4.5% [35] - CapEx was down 9% year-on-year, aligning with the guidance of a €200 million reduction for the full year [35][58] Business Line Data and Key Metrics Changes - Mobile ARPU increased quarter-on-quarter to €12.9, indicating a rebound due to a more rational pricing approach [36] - Mobile service revenues declined by 7.2%, but this was an improvement compared to Q2, attributed to ARPU increases [38] - Fixed revenues, excluding Sparkle, declined by 1.4% year-on-year, with fixed service revenues down 5% [39][40] - The number of broadband lines grew, with retail line losses decreasing to 225,000 from 346,000 in Q2 [43] Market Data and Key Metrics Changes - TIM Brasil reported a 3% year-on-year increase in service revenues, with EBITDA growing by 6.8% [54] - The FTTH network in Brazil grew by over 150%, reaching 1.9 million households [56] - The company holds an 11% market share in the cloud services sector in Italy, which is expected to grow significantly [21] Company Strategy and Development Direction - The company is focused on transforming into a leaner organization, with plans for 5,000 exits by the end of next year [7] - A strategic alliance with Google Cloud was announced, aimed at enhancing cloud service offerings and creating a new company for data centers [19][27] - The company is committed to reducing debt and improving cash conversion, with a focus on operational efficiency [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving stable revenues in 2020, despite challenges in service revenue due to a shift towards equipment sales [74] - The company is optimistic about the Brazilian market, expecting continued growth in key metrics [14] - Management emphasized the importance of cash flow and operational performance, indicating a shift in corporate culture towards cash generation [124] Other Important Information - The company has initiated a countrywide digital education initiative called Operation Digital Renaissance, targeting over 1 million citizens [48] - A partnership with Santander for consumer credit was announced, aiming to reduce bad debt and improve financial management [28][30] Q&A Session Summary Question: Outlook on service revenue for 2020 - Management indicated that while there is a shift from service revenue to equipment, they expect revenues to remain stable, with a slight decline anticipated [74] Question: Timeline for data center business monetization - Management clarified that the focus is on creating a cloud offering rather than monetization, with potential for small equity sales to finance growth [76][78] Question: Impact of cash taxes on future cash generation - Management confirmed that the lower cash taxes experienced will remain stable moving forward [107] Question: Broadband strategy evolution - Management stated that the strategy will focus on growing the broadband market rather than competing for market share, maintaining a rational pricing approach [96] Question: Update on Open Fiber negotiations - Management expressed uncertainty about reaching an MOU by year-end but indicated ongoing discussions with infrastructure funds [112]
TIM(TIIAY) - 2019 Q3 - Earnings Call Presentation
2019-11-08 16:16
Q3 2019 Financial Performance - Group service revenues decreased by 4% YoY, excluding Sparkle[37] - Domestic service revenues decreased by 6.1% YoY[37] - Brazil service revenues increased by 3.0% YoY[37] - Group EBITDA decreased by 4.5% YoY[37] - Domestic EBITDA decreased by 6.9% YoY[37] - Brazil EBITDA increased by 6.8% YoY[37] - Net debt reduced by approximately €1 billion in 9 months[13] - Equity Free Cash Flow increased 6x YoY in 9 months[13] - Net Debt at €24.312 billion, with a reduction of €419 million from Q2[37] Strategic Initiatives - TIM and Vodafone Italia network sharing partnership awaiting Antitrust clearance[15] - Strategic alliance with Google Cloud to tap cloud growth opportunity[19] - Consumer credit partnership with Santander Consumer Bank to enhance credit management and reduce bad debt, expecting €0.5 billion debt reduction in 2020[15, 24] Guidance - The company maintains its guidance for 2019, with low single-digit decrease in organic service revenues and EBITDA-AL[105]
TIM(TIIAY) - 2018 Q4 - Annual Report
2019-04-16 10:31
Investment and Innovation - In 2018, TIM invested approximately €1,165 million in technological innovation, representing around 8% of its revenues[956]. - The company committed around 1,300 personnel to technological innovation and engineering efforts in Italy[956]. - TIM's total investment in research contracts in 2018 amounted to €840,000, involving 18 contracts[954]. - The company participated in the Ministry of Economic Development's tender for 5G frequencies, with a total commitment of €2,399 million[957]. - By the end of 2018, TIM had established LTE 700 MHz coverage in over 1,400 cities, enhancing its market presence[980]. - TIM's patent portfolio included 3,256 patents in 2018, with 2,754 granted across 41 countries[971]. - The IoT Open Lab hosted over 180 companies and customers in 2018, fostering partnerships for IoT solutions[964]. - TIM's research and development activities received nearly €14 million in funding from the European Commission and national public administrations from 2016 to 2018[966]. - The company is actively involved in 5G projects, with significant participation in European initiatives and collaborations with major technology providers[958]. - TIM's Innovation & Technology department in Brazil concluded over 180 validation and innovation projects in 2018, with investments totaling R$4 million[976]. - The introduction of energy efficiency solutions led to a reduction in energy consumption of up to 10% during low traffic periods for 2G, 3G, and 4G access layers[984]. - TIM has been involved in RAN Sharing Solutions since 2007, optimizing network resources and costs, particularly in rural areas of Brazil[983]. - The company invested in TIM Lab and the E2E sector in 2017, enhancing smart parking applications and preparing for future NB-IoT and LTE-M commercial networks launched in 2018[984]. - TIM Participações joined the Telecom Infra Project (TIP) in 2017, establishing TIM Lab as the first TIP Community Lab in Latin America to develop universal standards for telecommunications infrastructure[987]. - The partnership with Nokia and BR Digital since 2018 has enabled connectivity services in rural areas, promoting digital inclusion and agrobusiness applications[986]. - The expansion of LTE coverage and activation of Carrier Aggregation strategy aims to improve customer experience through higher throughput[985]. - The company anticipates that large-scale IoT implementation could significantly transform the mobile market, particularly in agriculture and healthcare[984]. - TIM's strategy includes managing innovation and developing new technologies to remain competitive in both price and service offerings[994]. Corporate Governance and Leadership - The Board of Directors was fully renewed on May 4, 2018, with a total of 15 directors appointed, and the overall annual remuneration set at €2,200,000[996]. - The Board of Directors held 21 meetings, while the Control and Risk Committee also met 21 times, indicating active governance and oversight[142]. - The Nomination and Remuneration Committee met 14 times, reflecting ongoing attention to management and board composition[142]. - The Strategic Committee convened 4 times, focusing on long-term strategic initiatives[142]. - The Related Parties Committee held 9 meetings, ensuring compliance and management of related party transactions[142]. - The company experienced a significant leadership transition, with various executives holding key positions in finance, technology, and human resources, enhancing its strategic capabilities[1034][1037][1038]. - The company has a strong focus on technology and digital marketing, with executives holding advanced degrees and extensive experience in telecommunications and media sectors[1031][1037]. - The company is actively involved in corporate governance, with a structured Board of Statutory Auditors overseeing compliance and audit processes[1047]. - The company has a diverse executive team with backgrounds in finance, law, and technology, contributing to a well-rounded leadership approach[1032][1034][1036]. - The company has engaged in strategic appointments to enhance its legal and tax affairs, ensuring robust compliance and governance[1032]. - The company is focused on maintaining high standards of corporate governance and transparency, as reflected in its audit processes and board structure[1051]. Workforce and Employee Relations - The total number of employees decreased by 1,528 units from 59,429 in 2017 to 57,901 in 2018, with domestic terminations accounting for 2,198 units[1055]. - In Brazil, TIM Brasil group saw an increase of 150 employees, rising from 9,508 in 2017 to 9,658 in 2018[1056]. - The company plans to implement a Defensive Solidarity Contract affecting approximately 30,000 employees, which includes a 10% reduction in working hours over 12 months[1074]. - TIM aims to reduce its workforce by around 6,500 staff without forced redundancies while recruiting about 2,000 young people[1067]. - An agreement was signed in June 2018 to manage 4,500 redundancies in a socially sustainable manner as part of the 2018-2020 Business Plan[1069]. - The company has initiated negotiations for a new collective labor contract, addressing various employee benefits including paternity leave and early maternity return[1073]. - TIM has established a framework for industrial relations to enhance collaboration with trade unions, focusing on preventive information and discussions[1062]. Executive Compensation - The total compensation for the Board of Directors in 2018 amounted to €4.2 million, with a maximum annual remuneration set at €2.2 million[1076]. - The Executive Chairman's fixed remuneration was €900,000 gross per annum, with no variable short-term remuneration received[1078]. - The Chairman's fixed emolument was established at €600,000 gross per annum, excluding additional roles[1080]. - Mr. Genish's gross salary as General Manager was €1,000,000 per annum, with an additional fixed remuneration of €400,000 as CEO[1090]. - The target MBO for Mr. Genish was set at €1,400,000 gross per annum, but it was cancelled due to unmet EBITDA thresholds[1091]. - Mr. Gubitosi's gross remuneration as CEO was also €1,000,000 per annum, with a fixed sum of €400,000 and a target MBO of €1,400,000 for 2019[1097]. - Under the Long-term Incentive Plan 2018-2020, Mr. Gubitosi was attributed the right to receive up to 19,215,686 shares depending on performance[1098]. - The total compensation for the current Board of Directors amounted to €3,054,000, including fixed and variable remuneration[1099]. - The end-of-office payment for Mr. Genish could be either nil or €400,000, contingent on performance evaluations[1090]. - The Board of Directors revoked all attributions granted to Mr. Genish on November 13, 2018, with termination effective November 14, 2018[1093]. - The Long-term Incentive Plan allows for adjustments in share allocation based on performance metrics for the period 2018-2020[1092]. - The total fixed remuneration for the current Board of Directors was €2,487,000, with variable non-equity remuneration of €425,000[1099]. - Mr. Genish is not entitled to any MBO or Long-term Incentive payments due to performance outcomes[1095]. - Total remuneration for the previous Board of Directors amounted to €1,132,000, with fixed remuneration of €932,000 and variable remuneration of €187,000[110]. - The total remuneration for the current Board of Directors reached €4,186,000, which includes €3,419,000 in fixed remuneration and €612,000 in variable non-equity remuneration[110]. - The Chief Executive Officer, Luigi Gubitosi, received a total remuneration of €168,000 for his roles as General Manager and Chief Executive Officer during the reporting period[1102]. - Amos Genish, former Chief Executive Officer, earned a total of €1,065,000 during his tenure, which includes €859,000 as General Manager and €206,000 as Chief Executive Officer[1103]. - The remuneration for directors serving on various committees included €25,000 for the Nomination and Remuneration Committee and €28,000 for the Control and Risk Committee[1113][1114]. - The total remuneration for the Chairman, Fulvio Conti, was €0 as he did not receive any remuneration for his role as Director or Strategy Committee member[1101]. - The total remuneration for the Deputy Executive Chairman, Giuseppe Recchi, was €38,000, which includes €10,000 for his role and €28,000 for additional responsibilities[1123]. - The total remuneration for directors in the Strategic Committee was €16,000 for Massimo Ferrari and €3,000 for Giuseppe Recchi during the reporting period[1125][1127]. - The total remuneration for the Board of Directors included various amounts for committee memberships, with some directors receiving up to €28,000 for their roles[1112][1114]. - The overall financial compensation structure reflects a significant portion allocated to fixed remuneration, indicating a stable compensation strategy for the Board[110]. - Total compensation for executive officers in 2018 was €14.0 million[1139]. - Annual compensation for each member of the Board of Auditors is €95,000, with the Chairman receiving €135,000[1145]. - Total compensation paid to the Board of Auditors in 2018 was approximately €520,000[1146]. - Compensation for the Chairman of the Board of Statutory Auditors was €136,000[1147]. - Compensation for each Acting Auditor was €65,000[1147]. - The remuneration for the Control and Risks Committee members includes €15,000 for one director and €7,000 for the Chairman[1130]. - The total remuneration for the Board Directors varies, with specific amounts detailed for each member[1134]. - Stock options granted to executive officers are disclosed in aggregate, with specific plans outlined[1140]. - The company has no general non-competition policies for executive officers with strategic responsibilities[1140].