Infrastrutture Wireless Italiane S.p.A.

Good morning. This is the Conosco Conference Operator. Welcome and thank you for joining the In with Second Quarter 2026 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Luigi Minerva, Strategy, M&A, and Investor Relations Director of Inwit. Please, go ahead, sir.

Thank you operator. Good morning everyone and thank you for joining us. With me today I have Diego Galli, English General Manager, and Emilia Trudu, Chief Financial Officer. Before we begin, please allow me to draw your attention to the Safe Harbour Statement on page 2. Following a brief presentation of the second quarter 2026 results,

Thank you Luigi and good morning everyone. Q2 2026 results are very much consistent with our confirmed full year 2026 guidance, which reflects the current market context. The telco sector in Italy continues to go through a challenging phase, with low returns and minimum investments. Moving to the MSA display, to be disagreed with the recent interim decisions and we fight uphill against both ruling. We continue to believe that the MSA early termination notices are instrumental and fall outside the legal framework of the MSAs, which are valid until 2038, in which runs very efficiently the best quality and largely unique network in Italy. There are no rational In which remains committed to invest, while collaborating with its clients to identify shared value-for-value solutions on a fair and rational basis. Moving to Q2 results, new signs in new pots reflect the current market context, while the pace of real estate transactions remains sustained. As we anticipated, revenues on a reported basis are declining year on year by around 1%. Revenues are negatively impacted by the absence of uncommitted revenues linked to discretionary projects. If we were to remove such discretionary project-based revenues from Q2 2025 numbers, Q2 2026 revenues would show normalized annual growth above 3%. and bid after listed margins at around 72% are in line with the 2026 full year guidance. Following the dividend payments in May, our leverage ratio is now 5.7 times and will decline to the midpoint of our 5 to 6 times leverage corridor by ERF. At the current share price, EWIT offers a dividend yield of around 8.6%, reflecting the undervaluation of our stock. I hand it over to Emilia now for a review of KPIs and financials.

Thank you Diego, and good morning everyone. Operational KPIs reflect the current challenging market context. The deployment of 50 new towers in this quarter represents a slight improvement over Q1 and keeps us on track to reach our target of around 200 new towers in 2026. 380 new COPs were added in the quarter, confirming a growing tenancy ratio now at 2.4. We are aiming for more than 1,500 new COPs in 2026, targeting a year-over-year continuous growth in tenancy ratio. Additionally, 400 completed real estate transactions confirm our strong track record, aiming for approximately 1,600 transactions in 2026. Here today, we have built 65 new dedicated DAS, with projects in larger-than-average location size in Q2. With regards to the Next Generation EU Programme Italia 5G, We completed the coverage across more than 500 square kilometers of the country-wide areas, actively bridging the digital divide gap that affects those areas. We are making progress on Rome 5G smart city project, bringing 5G connectivity on the metro and digitalization to 100 public squares. The normalized 2025 total revenues base takes into account the lack of project-based non-committed revenue components, which we have developed over time with operators capturing their discretionary spending. Such discretionary budgets have been put on hold at this stage, given the current context of subdued operator investments and stagnant commercial relationships. Adjusting for this one-off step-down, we delivered approximately 3% normalized revenues growth into 2026, driven by the following components. Inflation link, based on a 2025 average index of 1.4%. Anchored commitment in terms of new towers, new pubs, and thus deployment in line with MSA commitments. Steady Holos growth across other MNOs and IoT Smart Infra growth, particularly in indoor dust across premium locations and projects in the North City vertical Normalized growth is structural and we expect the business to go back to growth in 2027 in line with the mid-term baseline outlook Moving to our financial highlights for the quarter, the two revenues reached €267 million, up 1% quarter-on-quarter and down 1% year-on-year, representing over 3% normalized revenues growth year-on-year, as we just discussed. The revenues components included for Towers and Anchors revenues up 2.8%, supported by inflation and MSA commitment. Conversely, OLOs and Smart Infra revenues were down as a result of the lack of project-based revenues such as work and studies, installation upgrades and EAS, more than offsetting the underlying growing number of POPs and DAS locations covered. On profitability, EBITDA was up 0.5% quarter-on-quarter and down 2% year-on-year to 240.7 million, with an EBITDA margin of over 90%. EBITDA services stood at approximately 191 million euros, up 0.5% quarter-on-quarter and down 2.8% year-on-year, with a 71.5% margin reflecting the structural operational efficiency of our business model, which allows us to support substantial investments. And as a reminder, we closed 2025 with a return on capital employed of 8.4%. The quarterly recurring free cash flow reflects the expected phasing of financial charges and remains consistent with 2026 food year guidance. In each one, recurring free cash flow reached euro 300 million down 5% year on year with 63% cash conversion. This was driven by structurally low recurring capex, efficient taxes thanks to the goodwill tax scheme, slightly positive networking capital, and financial charges profile that reflect phasing of interest payments. Below the recurring free cash flow line, growth capex were just above 70 million euros in Q2 and euro 160 million in H1 consistent with guidance. We closed H1 with free cash flow to equity of about 140 million euros. Leverage ratio reached 5.7 Following the dividend payment in May, we expect it to go back to 5.5 by year-end, in line with our guidance. We have an efficient debt profile, out of which 80% is fixed, 20% floating. The current average cost of debt is below 3%, and the average bond maturity is above 4 years. I now hand it back to Diego for the guidance and the closing section. Thank you.

Thank you Emilia. We reiterate our 2026 targets and medium-term baseline outlook reflecting the current market environment. Even in the unrealistic scenario in which the market remains stuck over the medium term, We would still be able to have a decent organic growth at around 3% for revenue and 4% for EBITDA, an attractive stable dividend and a solid balance sheet. The baseline outlook does not include the following potential upside Normalization of the industry dynamics Densification outdoor and indoor Opportunities to expand across digital infrastructure At the same time, the baseline outlook does not include the downside risk of MSA's actual termination, as we don't believe this is a likely or realistic outcome. Moving to the next slide, let me reiterate a few important considerations on the MSA prices and terms. All our prices are in line with the market. They are even more attractive because the MSA fee also includes unique rides to the benefit of the anchors. Once more, a benchmark of the MSCI anchor tenants' fees shows that they are competitive and well below the European average. The average total fee for Point of Presence is around €20,000. This is a combination of sales and listback, new towers and new pots. We estimate that broadly half of the fee is related to the financial component of the or Austin Fee. On both components, MSAs provide convenient and competitive terms. Clearly, they are intrinsically linked to the structure of the sales and index transactions as industry standard, with data around 500K per hour, with a transaction that included a large financial component, with an EBITDA per hour of around 25K, Our payback period on the MSA listback transaction is around 20 years, consistent with the necessary long duration of the MSA contracts. You know the next slide very well. Our network of about 26,000 sites is the result of 40 years of work from the team Vodafone and Inuit. where we could take the benefit of first mover advantage to build top quality sites in the best available locations. Our network is the result of the consolidation of multiple networks, best quality locations, connected with fiber, almost 20% land owned, optimized lease cost, best tenancy ratio. About 75% of our network is made of unique locations. Inuit is a strategic infrastructure critical to the national security and economy. Our network is available to our TAHANCOS on the all or nothing basis. Data traffic keeps growing. 2025 download traffic grew by 90% and upload traffic grew by 35%. We believe that the market needs further 10,000 towers in the next few years to cope with additional capacity in urban areas, coverage in suburban and rail and road corridors. The ongoing Spectrum renewal process can unlock a new cycle of investments. We would welcome proposals to link the Spectrum renewal to current holders with future CapEx commitments to support network quality improvement and the country's digitalization. However, plans to improve quality are not compatible with the termination of in-width contracts. Level of service could not be maintained while repatriating the best network. Duplication will last decades, will delay densification and cost billions. In the current industry structure, where there is separation between tower calls and service companies, we think that the Spectrum Renewal Framework should discourage duplication of infrastructure and support stability and creditability. About MSA dispute, the interim recent decisions were not in our favor, ruling it did not recognize the urgency requirement based on the assessment of the financial strengths of the company. Also, there was a view of change of control which we disagree with. We appeal the decisions and we remain convinced about the strengths of our arguments. In particular, change of control did happen in August 2022, when the shareholder agreement between Telecom Italia and Vodafone Group was terminated. Any different interpretation would have triggered a mandatory tender offer, which did not happen. In terms of timing, we expect the appeals to be concluded by November 2026, while the ordinary process will last for several years. Anyway, we remain convinced that the situation should be addressed through fair and reasonable discussions between INWIT and its clients, to identify shared value-for-value solutions. Q2 results are consistent with 2026 guidance. We reiterate both 2026 and big term guidance. INWIT has the best assets. There is no rational case for duplicating the existing high world infrastructure. TIM and Vodafone monetize their assets and INWIT paid in excess of 10 billion euros in exchange for long term contracts and proportional fees. INWIT business model and operational efficiency consistently bring the material benefit to its clients and the industry. In Italy, there is a dramatic need for investments and diversification in order to increase the performance and resilience of the network, and INWIT is the best option. And we remain committed to invest while collaborating with our customers to identify shared value for value solutions on a fair and rational basis. With this, we thank you for your attention and we will now open the floor to Q&A.

Thank you. This is the Coruscant Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1. Now we will pause for a moment as participants are joining the queue. The first question comes from Roshan Ranjit with Deutsche Bank. Please go ahead.

Oh, great. Morning everyone. Thanks for the presentation. I've got two questions, please. Firstly, Diego, thanks for the detail on the appeals process. One question I had, although I thought it was quite interesting, the language that was used from the judge as part of the TI hearing versus the FASWEP hearing, where it seemed they gave a bit more colour Perhaps going into the details of the merits or their stance on the merits of the case, can you explain why they were able to provide more colour on the TI situation versus the FastWeb situation, please? And secondly, you mentioned the Spectrum Framework auction. Any details there, because I think we should be hearing in the next day or two, and the trade-off between renewals versus investments. Have you been involved in any discussions there with Ashcom? Thank you.

The content is basically very similar. On TI the tone was more on the urgency, on Fastweb also on the merit and on the change of control. Honestly, no specific reasons for behind that, transparent and clear to us. Anyway, in our view there is some inconsistency and As we know, the injunction process is a process basically which follows a brief approach from a single judge. We just appealed yesterday and the day before yesterday, and we remain convinced that The change of control did happen in 2022 and there is no space for a different interpretation because among others, as we said, a different interpretation would have triggered a mandatory tender offer. On the spectrum, yeah, the process is ongoing since a while. We continue. Clearly, we are a relevant part of the industry and we are involved. Our position has been and is positive supporting all approaches which are supporting and facilitating investments, a new investment cycle in Italy. At the same time, we think that it is important that the framework is supporting the overall industry, and so telco, infracompanies, of the entire value chain.

Great. When should we hear on the framework? I thought it was kind of end of July, so it should be this week? We should be hearing on the details?

Yeah, there should be. The expectation is about the consultation document to come out in a few days or a few hours, let me say. and the consultation documents will be available for the government to take a decision and the consultation will be open for 60 days. Okay, understood. Thank you. Thank you.

The next question comes from Fabio Pavan with Mediobanca. Please go ahead.

Yes. Hi, good morning. Thank you for taking my two questions. First one is a follow-up on Algicom, provided we should have consultation document in a few hours or days. Then it will be up to the government to decide how to replace this renewal. Do you think this is something that could be solved before year-end? And do you think a decision on the renewal could come also if the uncertainty on the MSA persists? Second question is quite simple. I was just wondering if in these days or weeks you are engaging in some form of discussions with your anchors. Thank you.

Hi Fabio, on the timing, as we said, consultation out in few days, consultation will be open for 60 days, then eventually will be to the government to decide, there is a scenario where there is a decision by and by ERN that clearly the industry has been underinvested for years and all the players need visibility and predictability so the sooner the better in terms of supporting the industry and the new cycle of investments. With regards to the intersection with the MSA, honestly, I think that the new investment cycle is not consistent with the current situation and I think that any plan to improve quality and Digitalization is not consistent, is not compatible with the current situation on MSA and with the termination of in-width contracts, which are fundamental. In-width infrastructure is fundamental to support in the most efficient way not only the maintenance of current service level, but the improvement. On the engagement with the PD-Anchors, we have the process open with Telecom Italia on the, let me say, assisted procedure with loads of legally assisted procedure and while with FASTO there is no Thank you very much. Thank you. The next question comes from Paul Sidney with Berenbert. Please go ahead. Thank you. Good morning.

Just two questions for me, sort of big picture questions. You built 50 towers in the quarter. I'm guessing that's more than your competitors. Do you have a structural advantage over your competitors in the Italian market in terms of building new sites? And second question, we know that Italy needs 10,000 new towers. but there's obviously consolidation that's being speculated. But in my mind why would mobile operators want to reduce the number of sites? So do you see actually consolidation as a potential problem in terms of reducing the number of towers that are needed or is it all part of this? and we saw the 10,000 new towers irrespective of consolidation.

Hi Paul. On the competitive advantage from an investor point of view, I would say that Inuit has been, in the last years, the company building the highest number of sites and actually the market. Iliad has been building some towers, but excluding Iliad, we have been the only ones building the towers. and we have consistently built the end-to-end that we call operational machine from search to location search to permit to construction to maintenance and we think we have the most efficient and effective operational machine in the country. Let me say that also from a contractual point of view, we have a preferred supplier relationship with Tim Vodafone whereby he has the right of first offer and last call on all new towers. So we think that we have both an industrial and a contractual strong position. With regard to consolidation, it may drive on the short term some loss of point of presence, but overall it could be also the way to to drive the market to be more sustainable and support the investments to improve the quality and to ensure the operators to have better investments. So the overall context would be more supportive of investments. and the additional towers are structurally needed because, as we said, data traffic has constantly increased, artificial intelligence adds an additional layer on top and 5G is dramatically behind in Italy, Italy is behind Europe and Europe is behind the world yet. and additional points of presence are needed both for capacity reasons in urban areas and coverage in suburban and, as we said, on transport corridors. So, again, concluding, consolidation may drive some reduction in the short term, but overall we have a positive view for the medium-long term. That's great.

Thank you. Quick follow-up. Does the Italian government recognize that there is the need for four towers, the ten towers in number? What's the view of the Italian government?

I think that there is an overall recognition that the industry has been under strong pressure in terms of returns, and that's not sustainable, and that has reduced investment. Thank you very much. Thank you very much. Thank you. The next question comes from Rohit Modi with Citi. Please go ahead.

Hi, thank you for taking my questions. I have two please. One is a follow-up basically on engagement with anchors. I believe, and please correct me if I'm wrong, that you need to finalize your migration plan by 31st of March 27 after the MSA, if things remain as it is now. Now whether you engage with them on migration after the appeal decision or you will wait for it and if you win the appeal decision, do you need to discuss the migration plan or that can be postponed until you get the decision from the original case? and the second question is basically in the quality of your POPs, particularly in the OLO segment. The POP growth in the OLO segment has been consistent but the revenue growth has declined over 1H and if I look at your slide on page 17, if you look at the chart which is the growth in OLO from 25 to 26, I'm just wondering if do you expect the higher growth coming in OILO in the second half or if there is kind of discretionary revenue impact that's coming in there. Thank you.

Hi Rohit, let me start from the second question on Oros and let me comment that in general the market is quite soft, on a few also the lack of visibility on the frequency reviewer process and as we said in general the low returns on investments are making the market overall soft. Specifically with Olos we are doing good progress with our past Olo customers and the financial trend is impacted from the fact that last year we had some special projects on discretionary spend which this year has not been repeated. Basically related to specific work orders, specific project-based activities, which are depending on the customer's availability, customer budgets are not recurring every year. There were last year, but not in this quarter. With regards back to the engagement and the repatriation plan, the MSA says that the repatriation plan, so the plan whereby UNCODS has to give back and free up the towers, giving it back to INRIT, so the repatriation plan should be completed. by a period which should not be shorter than three years. So completion in a period not shorter than three years. That is the MSA framework. Honestly, we keep on being convinced that the current contract lasts until 2038. We know that the legal process will continue. The ordinary process will last for years. But anyway, we are open to be engaged and to engage with the operators if they want to start sharing the repatriation plan. Thank you.

Sorry, just clarification. You need to agree on a migration plan by 31st of March 27, right? That's the case, or you don't have to? That's on the part of MSC control?

Yeah, the repatriation plan has to be agreed between parties one year before the termination of the contract. Okay, thank you.

The next question comes from Ben Rickett with New Street Research. Please go ahead.

Hi there and thank you for the question. I had two please. Firstly, coming back to your discussions with the anchors, I think you said you're in talks with Tim. I just wondered if you could say anything about how productive those discussions have been so far and whether you're optimistic that a resolution can be achieved and then on FastWeb, when do you expect discussions with them to start again? And then a second question, I was just interested in how much this is all costing you in terms of legal fees and consulting fees. Presumably that's embedded within the guidance, but I was just wondering if you could quantify the cost of this dispute from additional professional fees.

Hi, Ben. Let me say, I think it's too early to be either optimistic or pessimistic. I think that the engagement with the customers is still clearly impacted by the legal processes and some uncertainties around the context. Anyway, within the legally assisted process, let me say, it's moving on, I would say, Let's see, the procedure will be open until mid-September. With FastWeb, we are open to discuss and will be always open, as we said. We do appreciate discussions based on rational and fair approach, and the discussion about the repatriation plan, and we are open to start having those discussions as soon as fast work will trigger them. On the cost, let me say that the cost are some millions of euros, we can estimate some in the low, let me say a couple of millions. and a few millions. Clearly we would have preferred to invest these couple of millions in new towers instead of legal cases, but this is where we are.

That's helpful, thank you. Is that of interest, why are you not discussing with Tim and Fosler together, given that their grievances are very similar, they have the same contract, etc.? ?

Honestly, I think that at a certain point in time that could be a scenario, but I don't see either an helpful or a realistic scenario in this case, and yeah.

Okay, okay, thank you. You're welcome.

The next question comes from Milo Silvestre with Equita. Please go ahead.

Good morning everybody. Just a quick follow up on the last question. You mentioned as well engagement with ANCOS due to legal process. Is that because you are waiting for the panel ruling on the interim measure?

As we said, we are open to discuss and clearly the legal process we think should give clarity on the legal framework. This didn't happen with the recent decisions but we remain confident that through the appeal process the decision will help give clarity about the legal context which may facilitate then the business discussion. So, honestly, we remain focused on having scenarios where we can have discussion based on fair and rational approach. The legally assisted procedure with TIRM can support this approach, and we will see with us. The current situation is not great for Inuit, of course. I think it's not great for anyone. The industry is told. It is impossible to plan and define the investments which are needed. So I think that the effort and willingness to get out from this situation of fair and rational approach should be from all parties.

Thank you. And regarding assisted procedure with PIM, are you discussing about the MSA or on minor, say, topics?

Yes, we started from more specific operational topics. So these are the ones which are currently under discussion. The overall framework covers everything, but the current discussions started from more operational topics. Thank you. Welcome.

The next question comes from Andrei Kaveshchak with UBS. Please go ahead.

Yes. Good morning, everyone. Thanks for the presentation. I have a question related to the potential investment obligations or remedies related to the spectrum update that you said we're expecting very shortly. We see there'll be a consolidation period, there'll be, I guess, a follow-up in terms of the budget, and those two things, or those several things, including the AGCOM, the budget, etc., will form, I guess, an opinion or clarity around what the associated potential investment obligations are. Presumably this will impact everyone starting 2029, and I was curious, from your perspective, You know, when is a time that, given, I guess, various planning considerations, permits considerations, etc., when is a time that the, from your perspective, that the anchors really have to start committing to some build with respect to these obligations? So, is it Going into 2027, because maybe the lead time is a bit longer, say two years to achieve these, is it maybe a year later? In any color on when there starts to be a situation that not doing anything in terms of the MSA dispute starts to hurt both sides and I guess the party on the network build side more economically. Thank you. Hi, Andrea.

Yeah, the intersection between the spectrum renewal process and the investment plans and MSAs, honestly, it's an interesting one. It's really the trigger is actually the decision about the spectrum renewal. Then, I think that immediately after that, there will be the need to define the plans actually to get this type of renewal. I think that plans should be already being defined in order to get the renewal. So that's an important figure which will quite fast then drive the need to put on the ground investments. And again, I think that The current context and situation and termination of the contracts within which are not consistent, compatible with plans to invest based on a spectrum renewal with commitments to improve quality.

I guess that the plans that you mentioned, they're a function of, you know, what the what the obligations might be, right? So we don't know those yet and I'm sure you have potentially some opinion given how the state of the grid of mobile networks in Italy looks like but more practically speaking if we're talking about an average kind of process for a new tower which obviously again depends I guess on the area but speaking about averages how long Before a tower has to be in the ground, do the parties involved actually start to kind of work on the permit processes, etc.? If you can be more specific, that would be very helpful.

Yeah, yeah. I mean, you're right, it depends on the areas, but on average, the time it takes to roll out the towers takes 12 to 15 months. That's the kind of time horizon. Thank you very much. You're welcome.

The next question comes from, sorry, as a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from Abhilash Moapatra with BNP Paribas. Please go ahead.

Hi, morning everyone. Thanks for taking my question. My question was on slide 12. This is obviously a slide you've shown us in the past where you talk about the tower market potential, you know, 7,000 to 12,000 new towers. I guess my question is how much of that growth do you think you can accommodate on existing inward sites? and therefore I suppose the balance would involve building new towers but how much of that growth can you actually accommodate by adding on secondary tenancies on your existing portfolio?

Yeah, actually Abhilash, that's the need for additional point of presence in the sense of additional towers. So basically all incremental. That's the way to consider it because as we said there is the additional need in urban areas for capacity and which cannot be accommodated on the current towers as well as coverage in suburban and rail and road corridors. So all this requires additional towers, new towers.

Correct, that's helpful. Maybe just to follow up, I suppose what is... What prevents the telcos from building those towers on their own? Why would they necessarily come to Inuit for building these sites?

To consideration, the first one is related to the preferred supplier clause whereby the anchor tenants are committed to have a special relationship with Inuit. Inuit has the right of making the first proposal and the last offer for all new towers built. Let me also say that Inuit is the most efficient company to do this kind of stuff. We are dedicated. We have taken the best people from Tim and all of them through the carve-out in the past. and so the teams and the people were moved to Inuit actually and in the last years we have kept on investing, on improving the capabilities, systems and process to deliver new towers in the quickest and most efficient way. So we think that both from a contractual point of view but underpinned by The best capacity, industrial capacity in the country and that's the reason why we have a competitive advantage in the market.

Good, thank you.

Welcome.

Miss Trudu, gentlemen, there are no more questions registered at this time.

Thank you all.