“Tim has started to grow again. A balanced solution is needed on the web»- Corriere.it

The increase in revenues and margins are the sign of a turning point. In Italy the business is reversing course. We promised a return to growth and we hope not to disappoint anyone. Pietro Labriola confident. The performance in the first quarter confirms that Tim is on the right track to return to growth, assures the CEO. The debt problem still remains, which could be reduced through the sale of the network. There are two offers on the table which the board and main shareholder Vivendi deem inadequate at the moment.

Let’s start with the accounts. Where does the breakthrough come from?

From the return to rationality. When I took over from Tim I said that for a while we would continue to suffer market pressure and work underwater. We have done a great team effort to reposition our offer on a higher quality level and offer customers what they really need. There is great attention paid to costs and return on investment, in three months we have saved another 200 million in operating costs, reaching 26% of the target for 2023. It is not just a rationalization of costs, it is also a process towards a faster and more efficient. We have curbed the price war and restored centrality to our leading role in digitalisation. We are designing the Tim of the future.

However, the Tlc market remains ultra-competitive, are you sure that growth is not just temporary?

Tim is catching up quarter after quarter and that shows a trend. Telecommunications is no longer a business that is based solely on sales, today services make the difference. The results of Tim Enterprise clearly show that it is performing well thanks to a unique positioning: we are crucial partners for strategic public and private companies, which rely on us for connectivity and for fundamental services such as the cloud and cyber security, which randomly grew 16% and 17% respectively in the quarter. I would also like to remind you that, with 3 billion euros a year, we are the second largest company in Italy in terms of investments and we have returned to invest heavily in mobile and 5G.

Tim Consumer instead suffers.

Tim Consumer is moving forward in the turnaround and the direction taken is the right one. We are working on all fronts: I am thinking, for example, of content agreements. After renegotiating with Dazn we also reviewed the contract with Disney+.

Debt continues to be the tipping point.

We had said that an organically complex debt reduction for which we are evaluating the option of selling some assets. a process is underway for the sale of the network which on the one hand has the objective of lightening debt and on the other that of overcoming the vertical integration between the network and services in order to be able to reap the resulting benefits.

On the table you have the offers of Cdp-Macquarie and Kkr. The latter says she is willing to improve her proposal but for the board these are inadequate offers.

We are in the middle of a particularly important negotiation and the evaluation is linked to various elements, not just the price. The operation must be included in a process that concerns Tim in his entirety and which has the objective of providing a balanced and sustainable industrial solution.

In short, does ServiceCo have to stand on its own?

S. ServiceCo with an adequate level of debt would already be a sustainable company today, projected in 2023 towards 3 billion of Ebitda after lease and 1 billion of operating cash flows. It is necessary to guarantee a level of debt that gives it long-term industrial prospects. Our goal is to build a new Tim that operates in three business areas: two are already running fast, Brazil and Enterprise, while the Consumer one is now under pressure with a cost structure that needs to be rationalised. I would like to underline one thing: for Tim, debt reduction is above all an industrial issue.

So if the debt doesn’t go down, Tim won’t grow?

It would certainly be a company with fewer options on the table. We have to decide how to reduce the debt from which various benefits could derive. On the one hand, we could go back to being a normal company paying dividends and with a better rating; on the other we could play our cards to accelerate growth and evaluate possible consolidation operations. Looking ahead, the Consumer market will go in this direction and Tim must be in a position to exploit this opportunity as a protagonist and not as a spectator. The same is true for Enterprise whose growth can be accelerated through targeted acquisitions.

However, there is the unknown Vivendi, which is against the sale at the values ​​currently indicated in the offers.

Decisions are made by the council and the assembly. What I hope is that there will be convergence on the part of all the shareholders, including Vivendi. our main shareholder and rightly makes his voice heard: this encourages us to seek the best solution in the interest of the company and of all the stakeholders. We are focusing a lot on making our stakeholders aware of the problems of the sector, in Italy and beyond. important to talk about these issues, we need solid companies to carry on the digital transition and make telecommunications sustainable.

The government is also paying attention to the network. The plan for the national network is linked to the sale.

Tim owns an infrastructure of strategic value for the country system and there are decisions and assessments that are up to the government in compliance with market rules.

At what stage the strategic plan? Are NetCo and ServCo ready to be separated?

We are moving forward. We have defined the perimeters and pro forma financial statements of both NetCo and ServiceCo and we are defining the mapping of all processes. For the unbundling of the network we had indicated 15-18 months.

What does it take to bring the stock up on the Stock Exchange?

Tim has been a very speculative stock in recent years. The operational improvement helps to give certainty and the closer we get to solving the debt problem, the more the margin for speculation is reduced.

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