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Telecom Italia: group solid at industrial and financial level

Strong cash flow generation, 12.8 billion euro liquidity margin and profitability among the highest in the sector

10/08/2013 - 11:37 PM

In response to Moody's downgrading, Telecom Italia emphasises that the Group is solid both industrially and financially, as demonstrated by its cash flow generation (expressed as the difference between gross operating margin and investments) of 32 billion euros in the last 5 years. Over the same period of time, it has reduced its net financial position by 7.6 billion euros, while investing a total of 25 billion euros in the countries it operates in.

Deleverage has always been, and will continue to be, a priority for Telecom Italia, as part of its plan for the sustainable development of its industrial activities.

Over the years Telecom Italia has pursued a prudent approach to financial risk management, maintaining a liquidity margin at least equal to the debt due in the next 18/24 months - at the end of June the liquidity margin was 12.8 billion – and adopting contractual documentation for its refinancing that does not contain capital repayment step-up nor rating-related acceleration clauses

Profitability remains at the highest levels found in the sector; at 30 June 2013, it stood at 38.9% at the Group level, reaching an impressive 48.7% on its activities on the domestic market.

As for the effects of the downgrade on the Group's financial structure and costs, see the full text of the communication issued on 2 August 2013, pointing out that because of the repayments made since then, the nominal total of loans outstanding with the European Investment Bank has fallen to 2,950 million euros.


Milan, 08 October 2013


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