Field day yesterday for Tim. While the stock, supported by the purchases of the aggressive Elliott fund (which announced that it holds - for now - a share of less than 5%), was flying on the Stock Exchange, the board of directors of the telephone company started the network separation project, launched the new strategic plan and presented the accounts for the last quarter and those for the whole of 2017, which will be illustrated to financial analysts today.
But here, point by point, all the Tim news.
VOLUNTARY SEPARATION OF THE FIXED NETWORK
First of all, Tim's board has mandated the managing director Amos Genish to start the formal process for notifying Agcom of the voluntary separation plan for the fixed access network.
The project, explains the company in a note, provides for the creation of a separate legal entity (Netco) controlled 100% by Tim, owner of the access network (from the exchange to the customers' homes) and all the infrastructure (buildings , electronic equipment and IT systems) and staffed to provide wholesale services independently.
The project will create the most advanced network separation model in Europe, creating a "one-stop shop" access point for regulated and unregulated wholesale services for all operators, including Tim, to guarantee equal treatment.
Netco, continues the note from the group, will have the resources to maintain a high quality network and support the country in achieving the objectives of the European Digital Agenda 2025 on ultra-broadband. The initiative will make a significant contribution to the digitization process of Italy, contributing to the evolution of the current regulatory framework.
The creation of the Netco will keep the perimeter of the Group unchanged, and will take place in accordance with and in compliance with the Golden Power discipline.
The voluntary network unbundling project will be communicated to Agcom according to the procedures and deadlines established by the Code for Electronic Communications.
NEW STRATEGIC PLAN
The Board has also given the green light to the 2018-2020 Strategic Plan, which with the DigiTIM project provides for the digitization of all processes. The objective over the period of the Plan is to significantly increase digital engagement with the customer, increasing the use of the self-care App to 85% and reducing interaction by call center employees by 30%.
The commercial offer aims to reach over 5 million new Fibra customers thanks to new video, music and gaming content, many of which are exclusive. On mobile, LTE penetration will rise from the current 76% to over 95% over the course of the Plan. TIM also aims to triple its TIMVISION customers (1,3 million in the Fixed segment at the end of 2017) and to double its Fixed/Mobile converging customers. These objectives leverage entertainment content available through important partnership agreements with national and international players and productions and co-productions of unpublished works.
In the Business segment, the focus on Fixed/Mobile/IT convergence, UBB, and brand heritage will evolve the Group into a true ICT company with a distinctive positioning in IT services and consolidating traditional revenues. By 2020, ICT and Cloud revenues will represent 25% of total segment revenues, and the number of Fiber customers will triple.
The Wholesale sector will return to growth, improving efficiency through new digital and automation tools. UBB lines with other operators will grow from about 1 million to about 3 million.
An important contribution to the Plan, explains Tim, will be made by the subsidiaries TIM Brasil, Inwit, and Sparkle.
In Brazil, the drivers are the migration to Mobile post-paid, today 17,8 million, equal to 30% of total customers; the rapid growth of residential fiber customers to approximately 1 million; and the rapid development of the 4G network, which by 2020 will reach over 4.000 cities (96% of the entire urban population).
Inwit will strengthen its leadership through the growth of the customer base, reaching a tenancy of 2,1x customers per site and the deployment of next-generation infrastructure such as the new "5G ready" sites equipped with fiber backhauling and thousands of small cells.
Sparkle will focus on data services, taking advantage of market growth trends by integrating its portfolio with Cloud, Data Center, network security and disaster recovery solutions, as well as consolidating the offer of Voice and Mobile services. It will also continue to expand its infrastructure geographically, extending its presence to 11 new countries (+25 IP POP) over the course of the Plan. Finally, 30% of the investments will be dedicated to the development of the infrastructure and the virtualization and digitization of the network.
DigiTIM's strategy aims to increase cash flow generation and create value through careful financial discipline based on cost control and investment optimisation. The use of data analytics will allow TIM, on the one hand, to improve the efficiency of investments by giving priority to those with greater value, and by leveraging the already existing UBB network infrastructure; on the other hand, to affect 80% of OPEX in Italy with opportunities for efficiency. Over the course of the Plan, TIM will reach 80% of housing units and 100 cities with FTTH technology via Fiber, thanks to a cumulative investment program in Italy equal to 9 billion euros, of which over 50% in expansion of the network infrastructure and innovation. In Brazil, investments of approximately 12 billion reais over the course of the Plan will be dedicated to further expansion of UBB. At the end of 2019 the CAPEX/Sales ratio will be less than 20% in Italy and around 20% in Brazil by 2020.
FINAL QUARTER AND FULL 2017 ACCOUNTS
As regards the accounts, Tim closes 2017 with revenues of 19.828 million euros, up 4,2% compared to 2016 (19.025 million euros). The growth of 803 million is attributable to the performance of the Domestic (348 million euros) and Brazil (455 million euros, including a positive exchange rate effect of 284 million euros) Business Units. The organic change in consolidated revenues recorded an increase of 2,7% (+526 million euros) on the year.
Profit for 2017 attributable to owners of the parent amounted to 1.121 million euros (1.808 million euros in 2016) and discounted net non-recurring charges of 714 million euros. In comparable terms, i.e. excluding the non-recurring items as well as, in 2016, the positive impact of the fair value measurement of the implicit option included in the bond loan with mandatory conversion, the 2017 profit attributable to the owners of the parent company would be higher by approximately 270 million euros compared to that of the previous year.
EBIT amounted to 3.291 million euros, down by 431 million euros year-on-year (-11,6%), with an EBIT margin of 16,6% (19,6% in 2016, - 3,0 percentage points). Organic EBIT shows a negative change of 455 million euros (-12,1%) with an EBIT margin of 16,6% (19,4% in 2016); discounted the negative impact of net non-recurring charges, including asset write-downs, totaling 913 million euros (185 million euros in 2016, at constant exchange rates). Without these charges, the organic change in EBIT would have been positive by 273 million euros (+6,9%), with an EBIT margin of 21,2%, up 0,8 percentage points compared to the financial year 2016.
Industrial investments in 2017 amounted to 5.701 million euros, an increase of 825 million euros compared to 2016. Adjusted net financial debt amounted to 25.308 million euros at December 31, 2017, an increase of 189 million euro compared to 31 December 2016 (25.119 million euro).
The distribution of a dividend for savings shares of 2,75 euro cents will be proposed.
In the fourth quarter alone, the group recorded revenues of 5,1 billion euros, (+2,8%) in organic terms, also in this case supported by activities in Italy (+2,0%) and Brazil (+5,3 ,3,6%). In particular, revenues from domestic services of 2,4 billion euros (+10%) achieved the best result in the last XNUMX years.
Also in the fourth quarter, group Ebitda amounted to 2,2 billion euros (+4,1%) in organic terms and without non-recurring items, benefiting from the performance in Brazil (465 million euros, + 13,6%,) and in the domestic market (1,8 billion euro, +1,9%); at the reported level, the group Ebitda is equal to 1,6 billion
Group Ebit amounted to 1,1 billion euros (+12,5%) in organic terms and in the absence of non-recurring charges; at the reported level, the Ebit amounted to 457 million euros.
