Tiscali : 21/09/2017 Results 1H 2017

o Increase in revenues (+ 6.9%) and customers (+ 7.8%, up to 716,700)

o EBITDA (+ 16.3%) higher than expected.

o Year-end targets confirmed

Cagliari, September 20, 2017

The Board of Directors of Tiscali S.p.A. met today and approved all items on the agenda and in particular, has examined and approved the financial statement as at 30 June 2017.

Results of the first half of 2017:

• Net income amounting to EUR 24.5 million - This is the first half-year since the company's foundation in which the net result is positive. This is in line with the trend that will also lead to the first net profit in the 2017 full-year financial statements.
• Revenues amounting to EUR 103.6 million, up by 6.9% as compared to the first half of 2016, on the upper part of the 2017 target range (+ 5/8%) as reported to the market last July:

  o +1.7% of increase in revenues for Fixed Broadband segment as compared to the first half of 2016: a positive percentage for the first time after more than five years.

• EBITDA amounting to EUR 14.4 million, up by 16.3% as compared to the first half of 2016, significantly above 2017 targets (+8/12%) as reported to the market last July.

• Further confirmation of the growth trend in customers in both UltraBroadBand (Fiber and Fixed Wireless Access) and Mobile, thanks to new Marketing&Sales strategies:

  o +32,000 customers (+8% as compared to first half of 2016) in Fixed BroadBand segment.

  o +56,000 customers (+37% as compared to the first half of 2016) in Mobile Services.

  o About 58,000 UltraBroadBand customers, 36,000 of which are LTE Fixed Wireless customers (Wireless Fiber To The Home - WFTTH) and about 22,000 are Fiber (FTTX) customers.

• Significant reduction of personnel costs: EUR - 4.2 million as compared to the first half of 2016 as headcount went down by 27% (i.e. 268 units) as compared to December 2016.

• Deployment of WFTTH LTE Base Stations in line with expectations: about 300 LTE Base Stations have been installed as at June 2017 as per the migration plan from Wimax to LTE, whose completion is expected within the year end.

Economic and financial values concerning noncurrent assets held for sale have been appropriately reclassified (included financial values as at June 30, 2016).

(*) The indicators in question were recalculated, including among the financial debts the loans granted by the Ministry of Industry and by the Ministry of University and Research for a total of EUR 0.8 million, previously not included. With the same logic, the data was recalculated as at December 31, 2016.

(**) The shareholders' equity of the parent company Tiscali Spa amounts to EUR 89.1 million as at June 30, 2017 (EUR 89.7 million as at December 31, 2016). At that date, the Company is not included in the specific cases as at Art. No. 2446 and No. 2447 of the Italian Civil Code.

(***) It is specified that, as at the present Financial Report, the Company has adopted a new way to classify its customer portfolio, in order to take into account the impact of the sale of the Business branch to Fastweb, and the refocusing strategy on core business. In particular, customers of voice and data narrowband - CPS, dialup - being progressively disposed, have been from the classification of its customer portfolio. With the same logic, users were re-restated at December 31, 2016 and at June 30, 2016.

• removal of the level of "Adjusted gross EBITDA".

• Separation of Financial Income and Financial Expenses items, instead of a single item Net Financial Income (Expense).

  Revenues

  Revenues from the Tiscali Group during the first half of 2017 amounted to EUR 103.6 million, an increase by 6.9% as compared to EUR 96.9 million recorded in the first half of 2016.

  The net change, equal to EUR 6.6 million, is mainly attributable to the following factors:

  • Increase by EUR 1.1 million (+ 1.7%) in the revenues from the "Fixed BroadBand" segment, reversing the negative trend of the last 5 years. This increase is mainly due to the trend of the Fixed BroadBand customer portfolio (+31.7 thousand units in June 2017, as compared to June 2016).

  • Reduction in the revenues from Broadband Fixed Wireless for about EUR 2.7 million due to the increase of LTE customers with higher value (about 35,000 LTE customers in the portfolio as compared to about 10,000 in December 2016) less than compensated by the reduction of Wimax customer portfolio.

  • MVNO revenues increased by 33.9%, thanks to the strong growth of Mobile customers, increased from 146,300 as at June 2016 to 202,000 customers as at June 2017.

  • "Services to Business and Wholesale" revenues increased by EUR 4.9 million (+63.9%); growth was mainly due to the increase in sales of services and products.

  • "Media & VAS" revenues decreased (a 10.7% decrease), growth of "Other" revenues (EUR 2.8 million increase as compared to the data of the corresponding semester of 2016).

Costs for purchases of materials and services amounted to EUR 70.7 million increased by EUR 9.3 million year-over-year thanks to the increased activity volumes.

The significant EUR 4.2 million decrease in personnel costs, amounting to EUR 15.9 million in the first half of 2017, is related to the efficiency gains and in particular is a result of the outsourcing of IT activities to Engineering and of the incentivized retirement activities carried out over the last 12 months which have led to a significant reduction in the average workforce if compared to the first half of 2016.

The above-mentioned effects resulted in a Gross Operating Profit (EBITDA) of EUR 14.4 million, with an increase by EUR 2 million year-over-year (EUR 12.4 million).

Depreciation and amortization costs for the first half 2017 amount to EUR 23.7 million, in slight reduction if compared to the EUR 24.5 million accounted for the first half 2016.

Moreover, during the first half 2017, restructuring costs have been accounted for EUR 3.5 million, as compared to EUR 0.4 million in the first half of 2016. The increase is mainly attributable to restructuring costs incurred by the company relating to the reorganization and downsizing of the workforce

As result of the above-mentioned items, net operating income (EBIT), net of provisions, write-downs and restructuring costs, was negative for EUR 12.9 million, recording a decrease by EUR 0.3 million compared to the result for the first half of 2016, which was negative by EUR 12.6 million.

The Result from assets disposed of and/or held for sale includes the capital gain on the sale of the BTB business branch to Fastweb (including the SPC Contract) accounted for upon completion of the sale contract, on February 10, 2017, and equal to EUR 43.8 million, in addition to the period result for the assets held for sale.

The Net Result of the Group is positive for EUR 24.5 million, improving compared to the comparable figure for the previous six months, negative for EUR 17.7 million.