TIM – in addition to the press release and the presentation of the 2024-2026 'Free to Run' Industrial Plan released on Capital Market Day on 7 March - provides the following additional information.
The pro-forma Net Debt after the expected deleverage from the NetCo transaction, amounting to approximately EUR 6.1 billion as of 31 December 2023, is expected to be approximately EUR 7.5 billion at the end of 2024.
This difference is mainly due to:
■ Ordinary operations: i.e. EBITDA AL net of investments, financial expenses, Net Working Capital (NWC) performance, TIM Brasil minorities and the tax and other charges;
■ Extraordinary operations: i.e. impacts related to the Netco transaction such as separation costs, potential price adjustment impacts and additional items related to Net working Capital (see page 64 of the CMD 2024 presentation).
With regard to 2025-2026 cash flows, the following should be noted:
■ Net cash flow is expected to be around zero in 2025 and around EUR 0.5 billion in 2026;
■ These net cash flow levels, when normalized by the effects described in the tables below, lead to a value of around EUR 0.4 billion in 2025 and EUR 0.8 billion in 2026. The cash flow normalisation factors are linked to extraordinary cash outflows at the working capital level mainly related to the effective severance of personnel subject to redundancy incentive initiatives already activated (see page 64 of the CMD presentation) and to the normalisation of debt costs due to the impact of the expected improvement in credit worthiness (the rating), which will allow the company to implement a more efficient management of the liquidity margin, and the decrease in charges related to extraordinary items.
TIM therefore confirms the 2024-2026 guidance presented to the market. It should also be noted that potential upside to guidance could result from earn-outs related to the Netco transaction and the potential disposal of Sparkle, the process of which is still ongoing.
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Below the tables summarizing what has been outlined: