Poste Italiane (AO) | Hold | IIC: Financials, telco, AI: the new Poste

Research evidence excerpt

Poste Italiane (AO) | Hold | IIC: Financials, telco, AI: the new Poste

le of the deal and articulating a clear view on why the transaction should also act as the catalyst for Italian

telecom consolidation.

Company’s pitch

Poste positioned the TIM transaction as a strategic-industrial move. Management argued that, without Poste's support, a view we

share, the consolidation of the Italian telecom market would take materially longer to materialise, if it were to happen at all. The

acquisition is also expected to underpin the digital infrastructure investments required going forward (data centres, edge

computing, AI-related capex), which would be more difficult to sustain on TIM's standalone balance sheet.

What’s new?

We see the deal as a potential catalyst for Italian telecom consolidation within 24 months, with a Poste-controlled TIM stabilising the

competitive environment and, in our view, accelerating the path towards a more rational market structure.

TIM Brazil provides optionality in the medium term: it is not necessary to support the combined entity's cash flow profile, unlike the role

it played for TIM on a standalone basis.

Management walked through the announced synergy plan with a good degree of conviction. We understand that the area with more

work to be done, but largest upside, is Enterprise & PA, which requires a meaningful technology transformation through AI deployment

to Italian corporates and Public Administration. Management remains confident that this bucket can be delivered.

FY 2026 DPS commitment was confirmed at the top end of the EUR1.25-1.30 range (as already anticipated during the Q1 conference call),

supported by Q1 momentum. Going forward, the combined entity's EPS accretion from 2027 onwards should support a similar dividend

trajectory.