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4-Traders Homepage  >  Equities  >  Italian Stock Exchange  >  Telecom Italia    TIT   IT0003497168

TELECOM ITALIA (TIT)
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Telecom Italia picks ex-Israeli army officer as CEO

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09/28/2017 | 09:00pm CET
Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan

Telecom Italia has picked a former Israeli army captain and Vivendi top manager as its new chief executive, betting on him to fend off rising competition in Italy, turn around operations in Brazil and appease politicians in Rome.

Amos Genish was promoted just two months after being named general manager for operations at the Italian phone group, where Vivendi is an increasingly assertive top shareholder with a 24 percent stake.

The choice of the 57-year-old telecoms dealmaker - a former chief convergence officer at Vivendi and a favourite of its chairman Vincent Bollore - comes at a time of growing unease in Rome about the French group's influence over Italy Inc.

As Telecom Italia's (TIM) board met in Rome, Italian government officials discussed a possible fine for Vivendi on the grounds that it failed to notify authorities of its effective control of TIM - a company deemed strategic.

Genish's predecessor, Flavio Cattaneo, left in July after clashing with both Vivendi and the Italian government.

Smoothing the strained relationship between the former state phone monopoly and Rome will be a key priority for the new boss.

"TIM must have a constructive collaboration with the institutions and regulators," Executive Chairman Arnaud de Puyfontaine, who also serves as Vivendi's CEO, said in a statement on Thursday.

In an apparent olive branch to the Rome government, Vivendi left TIM's Deputy Chairman Giuseppe Recchi - an Italian national - responsible for all assets associated with national security and defence, including international wholesale unit Sparkle.

Genish takes the helm as TIM is fighting battles on several fronts: Its fixed-line business is losing value, new competitors are appearing in both broadband and mobile and its only foreign business, Brazil, is grappling with economic malaise.

"The investment case remains complex," Barclays, which has an 'equal weight' rating on the stock, said in a note.

MILITARY STYLE

Genish's predecessor Cattaneo had launched a drive to cut costs, boost profitability and make Telecom Italia a more nimble competitor. He returned the domestic business to growth and raised investment in broadband and mobile infrastructure.

Still, Genish inherits a company saddled with 25 billion euros ($29 billion) of debt, while the imminent arrival of low-cost French mobile operator Iliad is likely to squeeze margins. Also, rival investments in broadband infrastructure by power firm Enel are undermining TIM's broadband drive.

Barclays said Iliad's entry and Enel's plans created "uncertainties about the revenue trends in 2017 and beyond".

Genish is TIM's third CEO in less than two years, leaving some investors guessing what is Vivendi's ultimate aim for the company: Use it as a pillar of its plan to create a southern European media empire or as an asset to trade in the next wave of mergers in European telecoms.

TIM, whose board also backed "in principle" a joint-venture with Vivendi's pay TV unit Canal+, is regarded as a takeover target because it is smaller than many of its European rivals.

Genish and Vivendi go back years: Genish sold Brazilian telecoms start-up GVT to Vivendi in 2009 and five years later convinced Bolloré to sell it on to Telefonica, making a capital gain of $4 billion for the French media group.

At Telefónica Brasil, Genish grabbed market share from rivals and turned it into Brazil's most profitable carrier in spite of the worst recession in more than eight decades.

Investors hope Genish, who once described running GVT like "a military operation", will set in motion a similar overhaul at TIM.

(Editing by Silvia Aloisi and Adrian Croft)

By Agnieszka Flak

Stocks treated in this article : Vivendi, Iliad, Telefonica, Enel, Telecom Italia
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Financials (€)
Sales 2017 19 717 M
EBIT 2017 4 142 M
Net income 2017 1 504 M
Debt 2017 26 500 M
Yield 2017 0,58%
P/E ratio 2017 11,09
P/E ratio 2018 9,90
EV / Sales 2017 2,12x
EV / Sales 2018 2,07x
Capitalization 15 357 M
Chart TELECOM ITALIA
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Telecom Italia Technical Analysis Chart | TIT | IT0003497168 | 4-Traders
Technical analysis trends TELECOM ITALIA
Short TermMid-TermLong Term
TrendsNeutralBearishBearish
Income Statement Evolution
Consensus
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Buy
Mean consensus OUTPERFORM
Number of Analysts 27
Average target price 0,99 €
Spread / Average Target 30%
EPS Revisions
Managers
NameTitle
Amos Genish Chief Executive Officer & Director
Arnaud Nicolas de Puyfontaine Executive Chairman
Piergiorgio Peluso CFO, Head-Administration, Finance & Control
Roberto Mazzilli Head-Information Technology & Security Compliance
Lucia Calvosa Independent Director
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