Ladies and gentlemen, good morning, and welcome to Telecom Italia Q3 2023 results conference call. Paolo Lesbo, Head of Investor Relations, will introduce the event. Ladies and gentlemen, good morning, and welcome to TIM Q3 2023 results presentation. I am here with the CEO, Pietro Labriola, the CFO, Adrian Calaza, and the rest of the management team. The review of Q3 results will be the first topic Pietro and Adrian will cover today, followed by an update on the delayering plan and the Q&A session. Pointing out our safe harbor disclaimer on page two, let me hand it over to Pietro. Pietro, the floor is yours. Thank you. Thank you, Paolo. Good morning, everyone. As you all well know, last weekend, our Board of Directors took a milestone decision we believe that not only will structurally solve the leverage issue the company has been dragging since more than 20 years, but will also allow us to transform it in a sustainable group with a lighter regulatory profile in the domestic unit, and with the ability to allocate resources on growing businesses in Italy and in Brazil. Moreover, we are delivering the main goal that was defined only one year ago, when we presented our delayering plan approved unanimously, and I repeat, unanimously, by the Board of Director at the time, reaching on a like-for-like basis, the stated target of leverage with macro condition that had been worsening since then. But you will excuse us if we intentionally start with the results and not with the update on the delayering plan, which is clearly the hot topic of today. As we mentioned many times, we'll be carrying out two jobs at the same time, so we want to give the right emphasis to the performance in the third quarter, which fully confirms the positive trends of the first half, something of which we are really proud of, given the outstanding effort and commitment of each of our colleagues. While TIM Brasil continued to perform in line or better than expected, domestic revenues and EBITDA grew for the second consecutive quarter, as we promised. In the nine months, both group and domestic performance support full year guidance. At group level, service revenue are up 2.1% year-on-year, in line with low single-digit growth target, and EBITDA is up 5.3% year-on-year, in line with mid-single-digit growth. At domestic level, we were not used to, service revenue are trending towards stabilization, while EBITDA is up 0.5% year-on-year, in line with flat to low single-digit growth target. Considering the positive drivers that so far have unfolded as expected and will accelerate in Q4 at domestic level, the full year guidance is confirmed. It will be the second consecutive year we deliver what we promise. Something never happened in several years. Let's go to the next slide with a deep dive on Italy. In Q3, all metrics in domestic businesses significantly improved both year-on-year and sequentially. Growth in total revenues accelerates. Service revenue are on track towards stabilization. Net of activation fees drag, the underlying year-on-year growth is positive 0.9%. EBITDA is up for the second consecutive quarter with a robust +3.6% year-on-year, driven by the tailwinds in Q3 and the new commercial agreement with Open Fiber in gray areas. Net of activation fees drag, the underlying year-on-year growth is over 7%. Nine months into 2023, the direction of travel is clear. We can clearly state it, Italian operations are steadily improving towards structural growth. Furthermore, in Q4, we expect easier comps on energy and labor, the ongoing effect of repricing, of higher wholesale tariffs, and of customer base stabilization, while the drag on activation fee will fade away. Let's move to slide six. Now, the update on the four entities, starting from TIM Consumer, where trends are improving quarter after quarter. I want to focus on the price action we have taken so far. After 9 months, we have enough data points to make a balance, and the conclusion is that price ups are working as expected. This year, we have targeted around 50% of wireline and 70% of mobile consumer customers, with a 10% average increase. While ARPU is growing, churn has been remarkably stable, regardless of the number of customers we have targeted in any given month. Indeed, churn in September is slightly lower than in March, when we started to increase prices. Credit to our team, who is managing this effort very effectively. Clearly, there is ground to carry on also next year. Furthermore, TIM Consumer confirms the leadership in FTTH market share for the fifth consecutive quarter. Slide seven. TIM Enterprise posts another quarter of growth with a faster pace versus Q2. Cloud and security keep growing, while connectivity is declining, an industry-wide trend, however, improving sequentially. The pipeline is very, very strong, with more than EUR 1.8 billion from ongoing negotiation, out of which the contribution from the National Strategic Hub is running ahead of expectation, with over EUR 400 million in pipeline, even if with some delays, as we commented last quarter. Considering the average duration of contract signed around three years, a significant portion of future revenues is secured. In the bottom half of the slide, we have NetCo that confirms the positive revenue trends, thanks to the new regulated prices, the improved technology mix, and extension into gray areas of the commercial deal with Open Fiber, accounting for around EUR 50 million this quarter. NRRP tenders now run at full speed. We expect to achieve the year-end target on 5G coverage and 5G backhauling, while we will progressively close the gap on Italia 1 Giga. However, in Sardinia, we face scarcity of specialized workforce, and this affects the pace of fiber rollout. Anyhow, we have one year to recover the gap versus the target. Hence, we don't expect any penalties. Always on the NRRP, we have a big positive news. As Infratel will anticipate in 2023, 30% of the total funds we are entitled over the coming years. This corresponds to approximately EUR 700 million, instead of EUR 500 million we originally indicated, and will be cashed by year-end. Let's now move to slide eight. Last but not least, TIM Brasil. Q3 results are again very strong, despite the full lapping of Oi this quarter. Revenue growth is driven by better customer mix in mobile, with a shift from low ARPU prepaid to high ARPU postpaid customers. EBITDA grows double-digit, driven by a very solid business performance. At the same time, EBITDA after lease is very strong, also thanks to accelerated decommission of mobile sites. It is worth mentioning that TIM Brazil performance is so strong, thanks to a well-executed strategy all round: improvement in customer service, better network quality, and clever customer base management, coupled to a solid expansion in FTTH. All this in a much better environment due to the market consolidation. The end game is a robust cash generation. This is the background leading to 45% increase in dividend announced two days ago. The new level, over BRL 2.9 billion, corresponds to a solid 8% dividend yield on current share price and represents the floor for future distribution. But I want to remember, as stated several times, this is not a coincidence, but the result of a journey started in 2015, initially with the turnaround of the operation, and then with the investment on quality and growth. We want to replicate this journey in Italy. Let's now move to slide nine. On the transformation plan, we are on track with around 27% of incremental full-year target achieved in the third quarter and 77% in the nine months. Main contributors are real estate, the reduction of energy consumption, and labor cost. In Q3, we also pushed on digital project, for example, with the launch of new activation process based on client digital ID and eSIM. We are also making our customer care more efficient, where we are on track to achieve 10% year-on-year cost reduction. On energy, we secured 10% of consumption saving and signed 9-year PPA extension for additional 200 gigawatt per year of green energy. Our 2023 needs are almost entirely hedged, including pass-through. Furthermore, we have hedged 75% of 2024 needs. I close this slide with an update on the commissioning. We are on track to dismantle 15,000 public payphone by year-end, around 7.5 have been already removed. We are also on track to shut down 6,700 central offices by 2028. We received from the national watchdog, AGCOM, the approval to close 1,300 by 2025. Let me now hand it over to Adrian for the Q3 financial results. Please, Adrian. Thank you, Pietro, and good morning, everyone. Q3 was a very good quarter for TIM, with positive trends, both in Italy and Brazil, as Pietro already anticipated in his section. Growth is accelerating in Italy, with total revenues up 2.2% year-on-year, and EBITDA up 3.6% year-on-year. Brazil continuing to deliver solid performance, with total revenues up 7.9% year-on-year and EBITDA 12.1% year-on-year. The nine months trajectory is fully in line with the 2023 full year guidance that we are today reiterating. If we now look at OpEx, they slightly increase year-on-year in Q3, mainly due to revenue-driven costs. However, labor and energy start to be a tailwind. In detail, variable costs are up 5% year-on-year. The increase in COGS, due both to ICT revenues dynamics and costs related to other goods sold, is not fully offset by the reduction of interconnection, 3% down for lower volumes and cost rationalization, and equipment 13% down due to the reduction of mobile devices sold. Commercial costs are also up year-on-year, mainly driven by higher content and VAS, due to higher multimedia revenues and higher commissioning costs only for accounting effects, but reducing year-on-year in cash terms, partially counterbalanced by the reduction in customer management costs. Industrial costs are down 4% year-on-year, thanks to lower network maintenance and energy, partially offset by industrial building costs linked to inflation. Concerning energy, down 9% year-on-year, the reduction is due both to lower prices and volume efficiencies, despite no fiscal benefits received in Q3 this year. G&A and IT are both down, the former 4% year-on-year for the reduction in professional server services, and the latter down 17% year-on-year, mainly due to lower managed service revenues. Finally, labor costs continued the sequential decrease year-on-year, down 5% in Q3, thanks to solidarity and lower FTEs. Now, on slide 12, we see that CapEx are a touch higher year-on-year in Q3, driven by Italy, where FTTH and 5G, including NRRP projects, are gaining traction. Additionally, we are still focused on CapEx prioritization and rationalization, especially in IT, that is down 20% year-on-year. In our Brazilian unit, the extension of 5G coverage with the standalone technology is on track and represents a significant part of the total Brazilian CapEx. Equity free cash flow after lease in Q3 is negative, mainly for working capital, higher financial expenses, and lower dividends from INWIT. On working capital, due to specific effects both in Italy and Brazil, the contribution is negative since we did some unwinding of some seasonal items. Nonetheless, you should expect Equity Free Cash Flow to be neutral on a full year basis, considering the anticipation of the EUR 7.7 billion from the NRRP funds. Net debt is a touch higher versus Q2, to 21.2 billion after lease. But considering what we just said, you should expect net debt after lease at year-end to be aligned to consensus, and we can commit on that. Next slide. In this slide 13, you get you have a recap of all the work we have done on refinancing. We work hard to enforce our liquidity position, especially considering the tough market conditions. We have raised more than EUR 4 billion since the beginning of the year, with TIM being among the largest issuer in the European high-yield market. It is worth mentioning that if you look at the last two years, the trend of TIM's yield is strongly correlated to the Italian BTP that, for the 5-year tenor, is now sitting above 4%, compared to below 1% at the beginning of 2022. Especially, yield on Italian BTP was at 2.4% back in July 2022, at the time of the Capital Market Day, and 3.5% in June this year, at the time of the last non-binding offer from KKR. In the bottom half of this slide, you have the usual chart on liquidity margin and debt maturities. As you can see, we have a strong liquidity margin, which fully covers the upcoming maturities until 2025, especially considering that between June 2024 and April 2025, there will be no maturities. Clearly, this before analyzing any situation through the deal of NetCo. With this, I hand over to Pietro. Thank you, Adrian. Let's now focus on the delisting plan. First, I want to recap where we stand in the process. The plan now envisages two separate and independent streams: the disposal of NetCo and the potential disposal of Sparkle. On NetCo, the decision taken by the board on November 5, was based on several independent legal opinions, indicating that the matter clearly falls within the exclusive competence of the board itself. It is not possible, under the Italian law, to transfer such competence to the shareholders. On this basis, the transaction was approved. Signing happened last Monday, and closing will be in the summer of next year. There are no deviation from the indicative timetable we indicated previously, since we don't foresee any hurdle on the approvals. Indeed, there are only two condition precedents: antitrust and Golden Power, on which we believe execution risk is manageable. I want to stress the significant improvement of KKR's offer during the competitive process. NetCo base enterprise value has increased by EUR 3 billion from EUR 15.8 billion in the first non-binding submitted in February, to EUR 18.8 billion in the binding offer. This improvement came despite the worsening of the macro conditions. Sparkle was originally included in the NetCo's perimeter, but we are now running a separate process. The board considered the non-binding offer unsatisfactory, and have been mandated to verify the possibility of receiving a binding offer at a higher value once the due diligence is completed, the deadline for which has been extended to the fifth of December. We are confident in a positive outcome. Let's move to slide 16. I will now review the key terms of the binding offer. Before we start, let me remind you that to understand whether the offer is value accretive, we must jointly consider two components: the straight value attributed to NetCo, together with the terms of the Master Service Agreement. Let's start from the first component. I will run the numbers step by step, trying to be as clear as possible. KKR's offer is equal to EUR 22 billion with earn-outs and conditional items. Earn-outs subject to a total or partial merge or combination with Open Fiber. I repeat, total or partial merge or combination with Open Fiber and regulatory relief within 30 months from closing amount to EUR 2.5 billion. Considering the comments that we all have heard in the last month, in terms of having a single fiber network in the country, they potentially represent an additional driver of value creation and deleverage for ServiceCo. Net of these earn-outs, NetCo EV is EUR 19.5 billion. Taking out two conditional elements, the additional earn-out related to benefit on energy and the profit from the liability management exercise, we derive a base EV of EUR 18.8 billion. Additionally, at closing, TIM will get IRU free of charge for a value of EUR 0.6 billion. So the real base EV would be EUR 19.4 billion. Deducting FiberCop minorities and debt-like items, but adding back the benefit of the liability management that will be completed before closing, we reach estimated EUR 14.2 billion. I repeat, EUR 14.2 billion. This is the key number because it represent the level of the leverage we expect to obtain at closing. It is worth mentioning that EUR 14.2 billion does not include Sparkle. Therefore, the deleverage will increase in case we successfully complete its disposal. The additional component will be known if and when we receive the binding offer. As said, the process is ongoing, and we are confident in a swift and positive outcome. Now, let's go back to the key number of EUR 14.2 billion. At the Capital Market Day, we said that the deleverage could be made up of various components. Specifically, we mentioned a potential scenario with the full disposal of NetCo, including Sparkle, plus the disposal of a minority stake of TIM Enterprise. This will lead to a deleverage target of approximately EUR 16 billion. Comparing the KKR's offer with the scenario envisaged at the Capital Market Day, there are two key differences. The first is that NetCo disposal is only one of the components considered back then. The second is that NetCo no longer includes Sparkle. Therefore, on a like-for-like basis, NetCo deal enables a deleverage we, which we expect to be better compared to the Capital Market Day, despite worsened macro condition. I now hand over to Adrian, who will explain the implication of deleverage for ServiceCo. So let's continue to run the numbers and focus on ServiceCo. Taking the year-end 2023 consensus net debt after lease of EUR 20.6 billion and deducting the EUR 14.2 billion of deleverage at the closing, ServiceCo is left with pro forma net debt after lease of EUR 6.4 billion, of which approximately EUR 1 billion correspond to the debenture issued in Brazil. This amount is consistent or even better compared to the target of below EUR 5 billion indicated in the Capital Market Day, that included Sparkle and the disposal of a minority stake in TIM Enterprise. So EUR 14.2 billion deleverage will be achieved through two components: first, the cash in, and second, pushing down existing debt. With regards to the debt, we will run a liability management that will be as market-friendly as possible. In particular, up to EUR 8.5 billion debt could be pushed down, including EUR 1.5 billion of intercompany FiberCop loan. We envisage an exchange offer of outstanding TIM notes due in 2026 and onwards, denominated both in Euro and U.S. dollars, and timing will be in the second quarter of 2024. With this, ServiceCo will be left with a leverage below 2x net debt EBITDA after lease, and will have sufficient liquidity to cover upcoming maturities until 2029. And again, this before considering Sparkle and NetCo earn-outs, positioning the company at almost the same level of our best-in-class peers average.... Now back to Pietro, who will review the conditions regulating the future relation between NetCo and ServiceCo and some financials of ServiceCo. Let's move to slide 18. The Master Service Agreement represents the second component to understand whether the offer is value accretive. The first message is that the MSA generates an expected positive impact versus the Capital Market Day plan. The second message is that the MSA is a pure commercial agreement, not financially committing ServiceCo, differently from FiberCo. This is because a minimum guarantee in terms of fees or volumes is not contemplated. This is a fundamental element to ensure ServiceCo is sustainable in the future. To be precise, ServiceCo will only grant the acquisition of a minimum quantity of certain engineering services consistent or below its business plan, but will also provide, among others, cloud services to NetCo on exclusivity basis for a period of time. At the same time, while benefiting from most favored client clause on a non-discriminatory basis, ServiceCo has granted exclusivity to NetCo. Let's now take a high-level review of ServiceCo financials. ServiceCo will be financially strong to compete as a slimmed-down, customer-focused service company in Italy and Brazil. At home, TIM will no longer be vertically integrated, and this will translate into the same regulation being applied to all market players, including TIM itself. In addition, it will still leverage significant infrastructure. TIM Brazil already is the most profitable telco in Latin America, with clear leadership among its peers in margin and free cash flow yield. It is set to outgrow the market and to deliver superior and sustainable value with a strong shareholder remuneration, as announced two days ago. In 2023, we expect ServiceCo to generate revenues at around EUR 13.5 billion, growing at a CAGR of around 3% in 2023-2026. EBITDA after lease of around EUR 3.2 billion, growing at a CAGR of around 10%. CapEx of around EUR 2 billion, substantially stable over time and landing at around 14% of revenues in 2026. EBITDA after lease minus CapEx of around EUR 1.1 billion, doubling by 2026. ServiceCo 2023 to 2023 financial, which are based on 2023-2025 plan, do not consider year-to-date actual result, while the 2023-2026 CAGR do not constitute a guidance. We will provide it during the Investor Day in March next year. In the bottom half, in the bottom half of the slide, you also find Sparkle's financials that are not included in the ServiceCo numbers I've just presented. Before moving to closing remarks, one final but extremely important message. Post NetCo, ServiceCo will still be the most infrastructure player in the Italian market. It will own and operate the mobile network coupled to the best spectrum portfolio, the largest data center infrastructure, the IP backbone, high reuse at the carve-out for the P2P, transport, and backhauling. This represents a strong competitive advantage. Now, my closing remarks. In 2022, we delivered what we promised, the guidance. Nine months in 2023, we are delivering again what we promised. TIM Brasil continued to perform better than expected, while the acceleration of TIM Domestic is materializing. Full-year guidance is confirmed, even in a worse context. We presented a plan in July showing how to solve the debt issue that was approved, I repeat, unanimously by the board. The NetCo transaction jumpstarts the TIM Delayaring Plan, restoring full financial flexibility as a result of a sizable deleverage. The MSA generates an expected positive impact versus the Capital Market Day plan and does not contemplate minimum guarantees in terms of fees or volume. ServiceCo is expected to generate a combined pro forma EBITDA after lease of approximately EUR 3.2 billion and EBITDA after lease minus CapEx of approximately EUR 1.1 billion in 2023, with cash generation set on a strong growth trajectory. Now that all the ingredients are in the right place, we will build the new team. Let's put the plan into action. With this, I open the Q&A session. Ladies and gentlemen, the Q&A session is now open. I'd like to remind you that if you want to register for your questions, you can do so by pressing star followed by one. To cancel your reservation, press star followed by two. Thank you. The first question comes from Mr. Giorgio Tavolini of Intermonte SIM. Mr. Tavolini, please. Good morning, gentlemen, thanks for taking my questions. A couple of some... The first one is about the authorization process for the NetCo sale. Can you explain the path taken by the team board of director, which led to preferring the direct sale of NetCo without a shareholder meeting rather than an alternative authorization process? And the second one is on the domestic guidance, given your nine months performance, I was wondering if you see scope to achieve the current EBITDA guidance for the high end of the indicated range. Many thanks. So let's start from the second one, that it's easier. Yes, sir, we will reach the high part of the guidance. But I try also to give a better view about the first question that is related to the process. First, let me say that I'm not a lawyer, but I come to learn quite well these matters. I base my conclusion on positive law, that is on the existing and actual Italian corporate rules, rather than interpretation or speculation. And under the Italian law, the contribution of a going concern and the sale of the shares of the resulting company is a typical board of directors decision. There is no rule at law stating the contrary. It is something which is the domain of the board and cannot be delegated to shareholders. This is true regardless the size of the transaction. The only exception to this fundamental rule is when the company by law lists expressly the situation, where it is required the prior authorization of the shareholder meeting. But TIM's bylaw does not include such provision, nor it requires such authorization. I also understand that someone might say, or is saying, that the transaction changes TIM's corporate purpose and as such has to be decided by the extraordinary shareholder meeting. I don't understand on which basis one could reach such conclusion, since we made a very careful and deep analysis of this transaction based on the effective parameters of TIM's network before and after the contribution. Always taking into account the way TIM is currently operated, which is far different from its monopolistic origin, and considering the language of the bylaw. Obviously, this analysis has been conducted with the support of eminent legal experts who have been asked to render a truly independent and unbiased opinion based on the large information we've been providing to them. Both factually and legally, they all concluded that the corporate purpose of TIM, providing with any means communication services to the end user, and for these purposes, exercising communication network in all possible manner, will remain unaffected. I have heard many speculation on this point, but I'm not aware of any analysis having been made with full knowledge of TIM's activities and networks before and after the transaction. Without it, it's impossible to come to any reliable conclusions. More than that, let me remind once again that this transaction is no more than the strict execution of the de-levering plan approved in July 2022. The plan was approved unanimously, and at that time, we engaged with all investors by way of a very comprehensive investor day. Neither then nor during the following month, we have been receiving negative comments on the proposed strategy. We assigned the binding contract last Monday, and our responsibility now is to implement all the execution actions. The closing is foreseen between end of May and end of July. Of course, we will explain to shareholders which believes that the board was not empowered to execute the transaction, why they are wrong, and should it be the case, we are ready to do it in court, where we are confident that the conclusion of our board will be confirmed. Even in the worst case, we do not envisage the risk of the transaction being delayed or blocked. I hope that it was enough clear. Many thanks, Pietro. Very clear. The next question comes from Mr. Wright, David of Bank of America. Mr. Wright, please. Yes, thank you for taking questions. So just maybe a clarification there. If there was a legal challenge to your board approval, does that stop the clock on the deal, or does the deal go ahead regardless, especially, and/or if there was a shareholder vote commissioned? And my second question, I think it's maybe answered by the slides, but just to confirm, Pietro and Adrian, the burnout looks like it accrues entirely to Telecom Italia. There is no minority participation in the earn-out. Is that correct? Those two questions. Thank you so much. So let me answer to the easiest one. There is no minority leakage, so the earn-out, it's all on us. Then, as I stated before, I'm not a lawyer, so I think that for the first question, I ask the help of Agostino Nuzzolo, our legal counsel, to give some more colors. So thank you for the question. It is not easy to imagine what the actions can be. Anyhow, the only, as we said, in terms of execution the transaction, we don't foresee delays events unless we have an interim injunction from the Court of Milan stating that. So on a precautionary level, not the final decision, we had to stop because there was an incorrect authorization process. So far, we have not received any notification. So, four days after the transaction and even before the signing, we didn't get any notification of such an interim measure. Maybe, but again, let me state again that we have based our conclusions on a legal and technical deep analysis of the network. I mean, we are sure that we will go on exercising network, either fixed and mobile. As Pietro was mentioning, we will retain the strategic part of the fixed network, so we are not giving up the full network. There is nothing in our bylaws asking for the ownership of the network, and so, frankly, we are quite confident that our vision of the transaction will be confirmed either even in court. Maybe I could just follow up with a... And I feel hesitant to present what ifs, but here is a what if. If there was a shareholders extraordinary meeting called with a motion of no confidence in the board following the decision, would that stop the clock or not? No, first of all, I mean, I don't know if I understood correctly. If you are asking if there is the way to revoke the board, by way of an ordinary shareholders meeting, no, not an extraordinary. So in the ordinary shareholder, so a shareholder, having more than 5% of shares, asks, the board to convene a shareholders ordinary meeting. So without any, special, majority, asking to revoke the board, again, there will be even though the board would be revoked, there will be no impact on the, execution of the transaction. The deal has been signed. It is binding. The only situation where we can imagine, an impact on the transaction is where the court will decide that, the authorization process was not correct. And to do that, it has to release an injunction against the company. This is the only situation where the transaction can be blocked, clearly waiting for the final decision on the merits. Was I clear or not? Yeah, that is clear. And yeah, appreciate you being available on the call. Thank you for that. My pleasure. But again, David, we have three legal opinion that confirm the position that Agostino was mentioned. Let's remember that we have the Collegio Sindacale, that have to have the supervision on the respect of the process of the board, and they approve the process. Are you allowed to release any of the information on the board voting? For instance, did the independent members all vote for the deal, or is that private information? No, David, we cannot. Okay, thank you so much, Pietro. You should- David. David, sorry, sorry. Just to complement David on that question, because, as you know, we had 11 votes in favor. So, you know how many dependents we have, so you can do the math. Okay. Yeah, useful. Thanks again, gentlemen. The next question comes from Mr. Ghilotti, Domenico of Equita. Mr. Ghilotti, please. Good morning. First question on the NetCo deal. So can you give us a sense of there is a capital gain in the transaction or there is any fiscal impact from the transaction that we have to add into the leverage calculation that you give us? And second question, still on the slide that has been presented. So can you give a sense of what the EBITDA contribution is coming from consumer and enterprise? And last, but not least, so on the earn-out, and particularly on the energy intensive earn-out, do you have any discussion ongoing or in general, the sector, is the discussion ongoing with the government? And so do you have any sense of visibility on potential decision on that front? Hi, Domenico. Let's start from the last one, the earn-outs on energy. Yes, if you remember, we started also with the previous Italian government, when Giancarlo Giorgetti, the actual MEF minister, was also the Minister of MIM, Economic Development. There was already a working team, a working table, to work on the main activity to be put in place to give to the e-telco industry in Italy, something to help the profitability of the industry. If you remember, we were talking about electromagnetic limits, we were talking about incentive for the switch off in the digitalization. We have always-- we were always been talking about energy, because let's remember that TIM, and so also the other telco, are among the highest consumer of energy, but we are not considered energy-hungry company, so we are unable to exploit fiscal incentive on that. So what we refer to in this kind of earn-outs is exactly incentives related to all the industry, and is not a company-specific item. Related to the consumer, the enterprise, without going details, I can give you also some more help. If you remember, in the seventh of July of 2022, we presented the level of EBITDA in 2025 of consumer enterprise. So the numbers were stated. That numbers were built on the 2022, 2024 plan. I remember to everybody that we reached the target of 2022, or better, we overperformed on the EBITDA. The 2023, 2025 plan, it's better than the previous one, so you can do an easy calculation about the, the numbers. Yeah. Domenico, hi. On the, on your first question, regarding the capital gain or the fiscal impact. On the capital gain, it's clearly too soon to say because the... We will have the final or carve out with the last perimeter that was negotiated probably in the coming months. But even though we ran already an analysis of how this deal could impact on our goodwill, you know, the level of goodwill that we have, because it's all, it's disclosed on our financials. So, we will see by the time of the closing. Clearly, there could be a small capital gain. We will be clear, We will have clear the number by the closing. On the second part, on the taxation, clearly this is a contribution on a company, so it has no fiscal impact at all. Domenico, so- Okay, thank you. Domenico, sorry, I don't want to appear impolite in my answer, but again, at page 17 of the presentation of the Capital Markets Day, you have the TIM Enterprise numbers, and on page 23, you have the TIM Consumer. I'm telling that not because I don't want to answer, but to show to everybody that what we told, we are delivering. So we are doing exactly what we told in July 7, 2022. Okay. Thank you, please. The next question comes from Mr. Luigi Minerva of HSBC. Mr. Minerva, please. Yes, good morning. Thanks for taking my questions. The first one is about the future earn-outs related to regulation. Do you still aim for a RAB-style regulation for the NetCo, which I think is technically not achievable, or do you refer to something else there? The second question is on the savers, whether as a result of the deal, can you think or plan for a savers conversion? And if so, what is the timing and the process? And finally, if I may just get one data point, if possible, on slide 19, could you tell us the ServiceCo EBITDA before leases? Thank you. Luigi, about the first question, future earn-out, it's important to remember that differently from the non-binding offer, where the earn-outs were EUR 2 billion, but was just EUR 1 billion for synergy and EUR 1 billion on RAB. During the negotiation, we were able to negotiate an increase from 2 to 2.5 and to have a unique basket. So if the RAB, that exactly what you mentioned, will not succeed, while the merger or the combination, and I stress the word combination, with Open Fiber will happen, we are able to arrive to get all the EUR 2.5 billion. So it's a basket, and it's not separated by the two parts. About the savers, I leave to Adrian. Sir? Well, clearly, we as we answered many times, we are always analyzing what's the evolution of the savings shares and what we may do. Considering also that this will be probably the second year that we won't be paying dividends to the savings shares due to the net result of the company. But clearly, we are one of the only four companies in Italy that have yet savings shares. And ServCo should be a more lighter company also in terms of the capital structure. We will see in the future. This is something that we are working on, but there is a not known clear decision yet. Probably when we disclose next year, the new plan 2024-2026, maybe we can have a decision. We'll see. This is something clearly that would need to be treated at the board level, and then, if it happens, proposed to shareholders meeting. So, it's too soon to say, but clearly it is under analysis. I think that you had a question about the EBITDA of IFRS 16 on slide 19, corresponding to the 3.2. That was your question, Luigi? Yes. Yeah. I mean, so the 3.2 is the EBITDA After Lease. Yeah. What is the EBITDA before leases, please? We are not disclosing yet that number. We will for sure have it with the full year numbers. But consider that proportionally, the impact of the leasing is much higher in Brazil than in the domestic business, proportionally speaking. Okay? So, you have probably the numbers of the nine months. It's something that should come up with some calculation. Okay. Okay. Thank you. Luigi, but it's important to remember that as stated by the EU law, NetCo will become a wholesale-only player, but it means that there will be no more cost-oriented. So it could be also an RAB model. But what I was trying to stress is that now we have an overall basket that can be used for both assumption, so combination or merge with Open Fiber and RAB. We just would one of that, and so it is possible to reach that amount. Before, there were two separate baskets. So for example, the possibility to have the Open Fiber deal and not the RAB, should have only EUR 1 billion, while in this case, for example, if the Open Fiber combination or merge that has a level of probability that could be considered higher than the RAB will happen, we are able to reach up to EUR 2.5 billion. Sorry, Luigi, just commenting on the EBITDA of 2023. It is information that is already in the slide, but it's important to consider it, is that the MSA between NetCo and ServCo will have no impact at the IFRS 16 level. So, this is also important when you consider what the level of EBITDA after IFRS 16 of ServCo will be. Okay? Okay. Thank you both for clarifying. Thank you. The next question comes from Mr. Mathieu Robilliard of Barclays. Mr. Robillard, please. Yes, good morning. Thank you for the presentation. I had a few questions, if I may. The first one was about the debt pushdown. You talk about EUR 8.5 billion. Could you give us maybe a little bit more details into what you're expecting to push down? Is it in terms of maturity, would it be short-term debt, long-term debt, or a mix? I don't know if you can give clarifications there. Then considering the slide on the MSA, you say that the MSA sign is better than what was included in the CMD plan. Now, I understand a lot of the conditions that you explained in the slide, but should I also understand that from a wholesale price point of view, you got to a deal that is more positive than what you were expecting back at the CMD? Then I had one on EBITDA. When you talk about the slide 19, and you show EBITDA after lease, I assume this is organic EBITDA. And my question was, historically, you've had a lot of restructuring costs, and so the organic and reported EBITDA is quite different. And I was wondering, if we look forward, should we continue to expect a high level of restructuring one-offs at ServCo, or will that be kind of split between ServCo and NetCo? If my question is clear. Then, that's about it. Yeah. Mathieu, I'm gonna answer the first one, and then Pietro clearly will answer the second one. In terms of maturities, clearly will be the mid and long maturities, 2026 and onwards, especially in terms of bonds. The pushdown, there will be for sure, also some loans. And additionally, the intercompany loan that we have today between TIM and FiberCop. But in terms of the bonds cleared, there will be maturities on 2026 and onwards, both euro-denominated and also US dollars. So, we will be as we mentioned, as friendly. We won't be discriminating any kind of bond, any kind of maturity above 2026. Why 2026? Because clearly, the 2024 and the 2025 are around the corner, you know. And especially since until between June 2024 and May 2025, we will have no, no maturity. So this only will include the second half of 2025. So, yeah, that's, that's the, probably the, the outcome of the, of the, the liability management. Okay, so if I can just clarify, because it's quite clear on your slide, page 17, that you were talking about 2026 and onward bonds, but that was under the caption of exchange offer. So the exchange offer relates to bonds that will be transferred to NetCo, is what you're kind of saying? Yes, clearly, the ones that will be traveling to NetCo. Great. Mattia, related to the MSA, as you can see in page 18, there's not just one point that is the part that makes this MSA better compared to the Capital Market Day version. Just to give you an idea, as we stated also during the speech, for example, we'll buy from NetCo some engineering activity and services with the transfer of the people to the NetCo perimeter. So there are some of these things that are better than what was stated in the Capital Market Day. Then there are also some regulatory assumption that are quite aligned with what is happening today in the market analysis of the national watchdog that are reflected also in this new MSA. So there are several details, but what is important to highlight is what exactly we stated since the beginning. We didn't want to take any kind of long-term commitment in terms of volume. Just to be clear, at the and when this decision was taken at the time, perhaps was the right decision. Compared with the FiberCop contract, we have no obligation of migration of customer to the FTTH. We have no specific commitment. These are hurdles that, I mean, the FiberCop one, that if we should continue in an integrated, vertical integrated vision, could be more difficult to give us flexibility to manage the industrial company view and the financial company view. Thank you. On the EBITDA question? Yes, clearly, Mathieu, it's organic EBITDA. Then, we will need to understand, and this will be clearly disclosed in the new plan, if we will continue with the agreements that the company did for many years today. So it will depend. It will depend on what the discussions with the unions will be. Then, even if you won't find it in the EBITDA 2024 and onwards, clearly, there will be still the drag in terms of cash out due to the previous agreements. But clearly, it is organic EBITDA. So, sorry, if I follow up on that- Yeah. But I assume part of the employees will be migrated to NetCo, and so anything that NetCo does in terms of the cost cutting, if it means, you know, restructuring cost payments, that would be under the responsibility of NetCo, it won't impact ServCo for the employees and the structure that has been moved to NetCo, right? Clearly, we will sustain the cost only that on the actions that the company decided until 2023. The new agreements that NetCo will decide will be on NetCo expenses. That's very clear. Thank you very much. The next question comes from Mr. Andrew Lee of Goldman Sachs. Mr. Lee, please. Hi, hi, everyone. I just had a question just around the MSA again, and just I wanted to get an understanding of your confidence in the agreement in terms of pricing for wholesale access, in light of kind of regulatory competition authority views on that. How confident are you that what you're looking at in terms of economics as a ServCo are sustainable over the coming years? Thank you. Lee, we are confident also because while we were defining this MSA, we were always checking what could be the rules. And as we stated during the call, we built something that is not discriminatory, because it's clear that it is the main driver. So we are confident. And as I mentioned before, if you try to look at the actual market analysis that we are facing today, for example, there is the proposal of the liberalization for 58 cities of the wholesale prices. It means no more cost-oriented. There are some proposals related to volume discount, that is exactly the way in which today Open Fiber is working. So we try to do all the best to be very compliant with all the rules. So we are quite confident. Thank you. The next question comes from Mr. Keval Khiroya of Deutsche Bank. Mr. Khiroya, please. Thank you for taking the questions, and I have two, please. So firstly, you made very good efforts in pricing up within consumer, and have front book price increases kept up with that book changes as well? And then secondly, I understand you obviously can't talk about the future headcount reduction within ServCo, but can you highlight how we should think about the cash out within the cash flow at ServCo from working capital and the existing headcount reductions already struck? Thank you. Thank you. For the first question, I will ask to Andrea Rossini to answer, so I can take some rest. For the second, there's Adrian. Thank you for the question. Can you kindly repeat the question because we didn't maybe perhaps catch up? Yeah, sure. So within consumer, you've, you know, you've seen quite a good impact from price increases. Can you talk a little bit about whether front book price changes and back book price changes have kept up in a similar way? All right. So, yeah, we indeed did a pretty extensive price increase, as you can see in the chart number 6. We have, of course, not the entire results, because as you see, there are about 3.7 million customers that were starting bill of price ups in September. Therefore, the evidence of that price up will unfold in Q4. We actually had pretty positive results, better than expectation and better than planned on the price ups. We also see a general trend in the market of price ups also by other players. So, in general, the activity has been pretty good. What is actually coming is an evidence of relatively low churn. On the front book and back book pricing, there is still some delta, but that delta is leaning down. Thank you. For everybody, Andrea is also able to smile, also, if he has a monotone approach. Okay, clear. On your second question, in terms of the cash out, so ServiceCo, clearly, as you should understand on the previous question, ServiceCo will carry the cash outs of the agreements that we did with the Union of the Articolo Quarto, and this, and cash outs until they expire. So this is an impact that we already stated that in the Capital Market Day of last year, and this will be the case. Then, obviously, this will be probably the main impact in terms of working capital, but clear, the working capital will probably be different in terms of seasonality compares to the actual one, because ServCo will maintain mainly the credit position, you know, and we have a lower payment stock, would work with the vendors, because those will probably flow to most of it to NetCo. So, we are not expecting the clear impact in terms of working capital or cash absorption in the first half of the year, and will probably be more equilibrated in between the quarters. But those are the main assumptions. We will work on these months in order to be more precise in terms of the working capital effect. For sure, we'll give more information in, when we present the plan. Okay. That's very clear. Thank you. The next question comes from Mr. Ben Rickett of New Street Research. Mr. Ben Rickett, please. Hi, thank you. I have two questions. Firstly, just a clarification. On the NetCo MSA, when you say it's non-discriminatory, does that mean that ServCo is paying the same prices that other broadband retailers are paying, or is there some sort of preferential treatment for ServCo? And then, second question, just on your financial expenses, which stepped up in Q3. Presumably that is your floating rate debt sort of repricing up to the higher rate. I was just wondering, has that process now finished, or should we expect financial expenses to increase again in the fourth quarter? Thank you. Ben, if I may, if there should be preferred price, they should be discriminatory. So if we stated non-discriminatory, it's because all these prices are available also to the market. Then, about the second question. Yeah, on the financial expenses on the fourth quarter, you clearly, the average interest rate that we have has been going slightly compared to last year, obviously, because of the new financing that is entering into a higher interest rate compared to the ones of the previous year. But going forward, since we are not planning any additional issue, and since the initial net financial position of the fourth quarter it's slightly above the one over the third quarter, we are not seeing additional impacts in terms of financial expenses on the fourth quarter. Probably will be aligned between the fourth and the third quarter. That's very helpful. Thank you. The next question comes from Mr. Brian O'Brien of UBS. Mr. O'Brien, please. Hi, good morning. Thanks for taking my questions. Can you hear me okay? Yeah. Just two quick ones. First, have you given any thoughts around what kind of credit rating you might target for ServiceCo post this transaction? And then my second question was just in relation to the existing European Investment Bank and bilateral term loans. Would they be included in the EUR 8.5 billion of push down to NetCo? Thanks. Yes, on the ratings of the company, even if we mentioned many times that that wasn't a target or a specific target, but clearly it is on our interest, it is on the interest of the board to have a better credit rating. I think everybody wants to have a better credit rating. As you know, we run an assessment with the three rating agencies that we work with. This was performed during the summer. I think that you can see the outcome of one of it that was released on Monday, I think. I don't know if it was... Yeah, it was Monday. That already gives a sense of or notion of what we can expect. Probably, you will find the other ones issuing the reports these days, and we'll see. If you look at the numbers, and considering that the assessment that we run with them was with the previous version of the MSA, and as we stated today, the final MSA, it's slightly better than the first one. We should be in a very comfortable area in terms of rating. But anyway, this will take time. It's clear that the company still needs to regain some credibility, some trust. We think that we are doing that, delivering what we promised, but this is a long road, you know? So that's why probably it wasn't an initial target, a specific rating. But going forward, hopefully, the outcome will be positive. On the other question was regarding the bilateral loans. Yes, there are some of it included, not the main value of this push down, but there is a couple of bilateral loans that will be included in the push down. Yeah. Okay, many thanks. Thank you. Next question comes from Mr. Mark Watts of Citi. Mr. Watts, please. Hi, guys, how are you? Just a couple of questions here. So in terms of the NetCo setup, obviously, it's not necessarily you guys now, but would you mind just confirming, has there been any kind of explicit supports or guarantees implied in that setup, i.e., you know, assuming the government is a 20% owner of that asset, you know, are there any direct or explicit support to support that structure? I guess the second question is, in terms of rating agencies, have you had much dialogue with them post-release. I just wondered what the expectations were from you guys, or do you have any expectations around where the ServiceCo might be rated versus the NetCo? Just for the avoidance of any doubt there, on the 2024s and 2025s, I guess they're staying in the ServiceCo. But just, just so I'm clear, you're, you're essentially looking to, to tender those bonds. Did you say in Q2, is that the target, Q2 2024? Those are my three questions. Thank you. Mark, I got your second question, but the line's not very good. So can you rephrase the first one, please, in- Yeah. The first question was just regarding the NetCo and ownership. So, one, I just wanted to clarify, what's the intention in terms of the ownership split? Because it's not exactly clear based on financial press. Second of all, assuming the government owns roughly 20%, has there been any indications that they would look to explicitly support the structure? I think this is obviously relevant for ratings implications. I just wondered if you had a view on that. Okay, I will start with the second one. In terms of the 2024 and 2025 maturities, clearly, those are already there, you know. The 2024 maturities will mature again before the closing, because they are the ones that are due in May of next year. So will be clearly repaid by us on the assets situation. And then the 2025, I think it's not... Clearly, it is, they will be repaid at maturity. So that's why we worked with maturities on 2026 and beyond. There are also, yes, a couple of loans. If you remember, we did in 2022 the loan with the SACE guarantee, that clearly has an important step up in terms of interest rate by the third year. So probably also this one will be somehow repaid. But this is something that we are working on. But the thing that we defined is that maturities to be pushed down are 2026 and beyond. About the first question, what we know is that we have all the equity commitment letter of the different investors that will participate. And then, we know, because this is part of the contract with KKR, that they will keep the control until the closing under the antitrust rules and the civil law. So these are the information that we have that are what is important in our decision-making process. Then, what will be after the closing, the way in which they will reorganize the company, is not in our hands, but the visibility today is that everything is full funded. We have the equity commitment letter, and we know that until the closing, there will be the absolute control of KKR. Okay, and just your expectations from rating agencies around the ServiceCo rating being less than 2x levered. Do you have an expectation as to where it should be rated? Well, as I answered before, I think that the initial rating won't be aligned to those metrics, you know. It's clear the rating agencies will need will like to understand if we can deliver what we mentioned in terms of the trends of ServCo. They will need some time to align their rating to the to specific metrics. But anyway, if you will see these days, you can see from the one that was published on Monday, that there is already a forecast of what could be the rating. You know, the average of our peers in terms of leverage is around 1.7-1.8. And you know that between those peers, there are many of them that are investment grade. I can, I won't say clearly that that's will be our initial target, clearly. We will need to work, we will need to see a couple of years. But, if we deliver what we think that the numbers will be, clearly, we should be there in a couple of years. Got you. So the ServiceCo target for rating is it within the next couple of years? No, I think that there will be an initial upside, clearly. I know if you read the Moody's report issued the other day, and So there will be an initial upside, one, two knots, two knots probably, we'll see. But then the trend should improve going forward. Okay. Thank you. Next question comes from Mr. Fabio Pavan of Mediobanca. Mr. Pavan, please. Yes. Hi, good morning, and thank you for taking my two questions. First one is on regulation. So yesterday, Telefonica also reached Capital Market Day, and the management was very clear in calling for the regulation for the space. They said it's hard for telecom operators to meet the target in terms of investments at a time when regulation is so hard, competition is so high. So I was wondering if you have any comment on this. Also, when it comes to fair share contribution, here again, Telefonica was saying it's time to give money back to telecom operators. And second question, eventually a follow-up on the questions which were asked again on the ServiceCo possible. Maybe for Adrian, I suppose you've already done some exercise, and I was wondering if you can help us in having a better understanding on what we should expect as financing costs for ServiceCo, considering that, yes, that file will go down at some point, just in this rate environment, you will be managing increased number of liquidity. So just helping out in better understanding what could happen. Thank you. Thank you, Fabio. I have heard my friend, Ángel Vilá, CEO of Telefonica, yesterday stating, "We want our money back." And I cannot do any other thing than repeat exactly what he told related to the fair share. We want our money back. We did some simulation. If you image that all the customer move towards 4K and using TV screen of more than 50-inch, the risk is that in 3-4 years, we can have the volume of the data that you have to transport, that could be multiplied by 3x-4x. And this is something unsustainable in our numbers, but not in the team numbers, in the numbers of all the telco player. This is not a case that is something on which there are several telco player or all the telco player in Europe, they are stating the same thing. Then, I participated also to an event where a representative of the OTT told us that they have good idea in how to manage the networks, and do not have this kind of volume increase. And I told him that, they are more than welcome to come here and explain how to do that, because we don't want to multiply by 2x or 3x our investment. Related differently on the regulation, and I understand very well the Spain situation, because it's not far from our situation. Let me say that our situation is also worst. But I think that at the European level, everybody has to understand that if we want a digital Europe, we must have digital network, 5G and FTTH. 5G and FTTH ask for investment. We are not doing charity; we must have return on investment. And in the actual market condition, the risk is that this investment does not have a return on investment. And to avoid to be considered, let me say, a kind of telco union representative, but putting on the table always facts. Look at Brazil. They were the country with the worst mobile network until 2015. Then they moved from five to three players. Then they changed some rules, then they allow to the telco player to buy the 5G frequencies for a lower price, taking a commitment. And now, are you seeing what is happening in Brazil? They have the best 5G network, Release 16, so the real 5G and not the fake 5G, compared to all the other countries. And they did it not in 10 years, they did it in two years. So if the operator are able to have the right return on investment, they can invest on the network. And investing on the network, they can allow to the GDP of the country to be back to grow, because all the new technology requires this kind of technology. So I think that, what Telefonica told is 100% agreed also by us, and it's not only a matter of fair share, it's a matter that we cannot continue with rules and laws that reflect the past and are not the same to everybody. Just to give you an idea, I'm on a social network, and yesterday I receive, I receive a pop-up saying, "If you want to continue to use this service, you have to start to pay EUR 12. Or differently, you have to agree on the fact that we can use your data." If I try to ask EUR 12 of increase, I have to go through what in Italian language is called forche caudine. So I have to go through several steps that are not acceptable if my competitor, because the telco market is no more only telco, have different rules. So I'm not asking, and the telco in Europe are not asking for more rules for the others, but we are asking for equal rules for everybody. About the second question, I leave this to Adrian. Yeah, sure, Fabio. The second question will be much easier. But clearly, in terms of, you know, the impact of the deleverage that we will have, and we disclose which portion is between domestic and Brazil. Initially, the average cost of the debt won't be different to the actual one that we have, around 4%. But going forward, it will depend, it will depend on mainly what will our strategy post-deal will be, because even after the liability management, we'll have a significant cash position in gross debt. We will decide what to do going forward, depending on the opportunities that we will have - may have. But consider that going forward, we expect positive cash flows from the operations that... This should go down in the following years. But I think that you have the initial net financial position that we should have moving forward. You know, the average cost that we have today. So you know that it should be around or below EUR 400 million initially, and then going forward should go, should improve. Okay. Thank you both. Very clear answers. The last question comes from Mr. David Gladstone of Millennium. Mr. Gladstone, please. Hi. Just to clarify on an earlier question, you mentioned there were a couple of bilats that would also move as part of the debt pushdown of the EUR 8.5 billion. Can you confirm how much that is, and does that include the EIB loan? Yeah. On the bilateral of the EIB, it's around initially 250, if I'm not mistaken, but we can give you the right numbers after the call. Okay? Okay. And so the remainder will be, I guess, the maximum amount of bonds that could be exchanged? Yes. It will depend. It will depend on. You know, we need to go a step backwards. The offer is fully financed, as Pietro was mentioning. So, it will depend the level of pushdown on the Liability Management exercise. And considering what we mentioned, that we will include in this exercise, maturities 2026 and beyond. Then, depending on the result of the exercise, we will need to then analyze what would be the second step. But those are the initial definitions that we have today. Okay, understood. Thanks very much, and well done on getting the network deal almost done. Thank you. If I may, I will have some closing remarks. I think that the result that we show today with an improvement year-over-year at group level of EUR 300 million on the EBITDA, completely, let me use this word, destroyed by the increase of the interest rate, show exactly what we stated since the beginning. We can improve the operation as much as possible, but if we don't solve the debt issue, will be difficult to give to this company a strategic and industrial option for the future. This is what we stated the seventh of July, 2022, and we are here in less than two year later to deliver exactly what we promised. The number are exactly the number that we show at that time. This is the real possibility for TIM to be back, to have the opportunity to compete in the market, and I don't think that we'll be the only one to go through this kind of approach. So again, really appreciate the opportunity today to share with you this view. I think that we are giving to TIM the opportunity to be back to compete and stay on the market, and we will go through our roadshow to give all the further details. Our IR team is always available for any question. See you for sure in the middle of February for the preliminary results, and in March for our Capital Market Day. Last but not least, I want to thank you, all the team, because it's really important to explain as we were driving a rebound on the operation while we were putting in place the largest deal in Italy on the TMT in the last 5 years, the 6th at European level, and the 31st-- the 31 at worldwide level in 5 years, in a period of time where the interest rate is completely different. Thank you to everybody.