Telecom Italia shareholders: Identikit 2007

Before beginning our analysis, a few introductory words are in order. The identikit given here registers and takes into consideration the sole ownership of Telecom Italia S.p.A. ordinary shares to the tune of 13 billion. The Shareholders’ Register supplies information only regarding this type of ownership, since ordinary shares can be traced back to single investors at the moment the dividend is paid out (which occurs when it is credited to the current account of the single shareholder). The analysis does not, therefore include savings shares which, being in the bearer’s name, do not allow the owner to be traced.
Savings shares amount to over 6 billion, a little less than 50% of the number of ordinary shares. If we only took the latter into consideration it would inevitably imply a “partial” photographic analysis of the shareholding body.

Approximately 23.6% of ordinary Telecom Italia Italian-based capital is owned by over 660,000 physical persons, to whom should be added individual companies, companies without autonomous juridical persons and, in general, all companies which do not carry out professional investment activities in shares, to whom we can then add a further 8.2% of voting capital. According to this method, the overall percentage of retail shares held hovers around 32%. Telecom Italia therefore has one of the most extensive shareholder bodies in Italy and it is likely that our shares are present in almost all shareholder portfolios of Italian investors.
Finally, considering foreign individual investors, the percentage rises to 34% of ordinary shares held.

Graph 1.1 shows the shareholder composition as at 30 September 2007, on the basis of communications received from the banking institutions in relation to the payment of dividends (26 April 2007) and other available information (the updated information is always available on Telecom Italia website, Investors section).

1.1 – Composition of the retail shareholding body as of September 2007 (source: Telecom Italia Shareholders’ Office)

On 28 April 2007 Pirelli & Co. S.p.A., Sintonia S.p.A. and Sintonia S.A. communicated that they had reached an agreement with primary institutional financial investors and industrial operators for the sale of 100% of Olimpia S.p.A.’s capital, a company owned 80% by Pirelli & Co. S.p.A. and 20% by Sintonia S.p.A. and Sintonia S.A. The acquisition was finalised on 25 October 2007 by a vehicle company, Telco S.p.A., to whom Mediobanca S.p.A. and companies of the Gruppo Generali contributed voting capital of 5.6% that same day.  Subsequently, Olimpia was merged by incorporation into Telco S.p.A., which holds 23.59% of ordinary Telecom Italia capital.

Individual shareholders

The most recent picture available of Telecom Italia individual shareholders (April 2007) shows that 67% of the total is made up of men, with an average ownership of 5,125 ordinary shares. Women, on the other hand, represent 33% of the total, with an average ownership of 3,684 ordinary shares (see graph 1.2).

1.2 – Shareholder mix and average ownership ex Shareholders’ Register 2007 (source:  Telecom Italia Shareholders’ Office).

The average data for overall ownership (men and women) amounts to 4,652 ordinary shares. The money equivalent of average ownership is 10,000 euro (using the ordinary Telecom Italia share price as at 5 December 2007).

Last year’s trend

On the basis of the numbers recorded in the 2006 and 2007 Shareholders’ Register, the number of individual shareholders has fallen by 110,000 units (from 770,000 to 660,000), while average ownership has risen by 5%, suggesting that stock market performance in 2007 has convinced shareholders with reduced positions (i.e. lower than the average data) to sell their investment in Telecom Italia (of course, and as already stated, this analysis is limited to ownership expressed solely in terms of ordinary shares).

Via daily contact with individual investors, it is legitimate to assume, however, that we are not here dealing with disaffection towards TI on the part of the real shareholding body, but rather with a different investment choice as visible in the sale of ordinary shares and the purchase of savings shares, which in the Statute incorporates the right to a distribution of net yearly profit of 5% of the par value (0.55 euro), and at any rate to receive a larger dividend compared to ordinary shares to the tune of 2% of the share’s par value.

Geographical distribution

Analysis of the geographical distribution of Telecom Italia shareholders shows a strong concentration in the main Italian cities (Milan, Rome, Turin) and in the regions of northern Italy. This is in line with the main data on wealth distribution and GDP.
In particular, Lombardy registers the presence 26.2% of shareholders and 27.6% of retail share capital (revealing an average ownership which is greater than the national level and equivalent to 5,000 ordinary shares versus an average data of 4,652). Emilia Romagna follows with 11.8% of shareholders and 11% of share capital, then Piedmont with 10.3% of shareholders and 11.2% of share capital and, finally, Veneto, with 9.6% and 9.3% respectively. The other regions of Italy reveal lower percentages (an average of 3.0%).

In terms of performance, the reduction in the quantity of shareholders in the 2006/07 two-year period is distributed in a somewhat homogeneous manner throughout all regions of Italy. Those which have felt the impact most are Friuli Venezia Giulia and Emilia Romagna (-16.2%), while the least penalised are Sicily, Basilicata and Calabria (-11.7%).

TI alw@ys ON: always in touch with Telecom Italian shareholders

Over the years Telecom Italia shareholders have shown a growing need to receive information on their share investments and on the choices made by the company, and they have identified the Group as the most suitable interlocutor to supply quick, clear and credible answers. The individual shareholders’ Club (8,300 members as at 20 December 2007) was activated almost two years ago so as to take these requests on board, as well the need to transform them into reality them, and adopt them as its mission. In this way, together with the economic and financial information already available to all members of the Club (quarterly Newsletter, weekly stock market report, text and e-mail alerts), we now have "Zoom". Other products will be added to these in the course of 2008 so as to enrich our offer with new incentives and analysis.

The special e-mail address for individual shareholders investitori.individuali@telecomitalia.it received over 2,000 messages in 2007, and these allowed us to deal with financial, business and Group-related issues leaving no stones unturned. We cannot but thank all of you for the trust you continue to place in us and for the opportunities for research and study that you provide through your communications, doubts and reflections.

Finally, the club website ticlub.telecomitalia.com received a monthly average of 20,000 visitors, confirming a certain level of satisfaction in the use of the web as a channel of communication which is ideal for staying in touch with the Group and for supporting other initiatives such as the TI Premia competition (closed 28 October last). In almost 10 months of activity the TI Premia competition has given out over 1,000 prizes.

TI Premia competition – Second Edition

On 17 December 2007 the second edition of the TI Premia competition was launched, dedicated solely to individual shareholders. As well as numerous prizes on offer every week, the novelty this year are the special sections which give contestants the opportunity to participate in the prize draw for, amongst other things, exclusive visits to Ferrari and Ducati. The rules and all necessary information are available at the Club website ticlub.telecomitalia.com. Finally, for all shareholders who take part there are two super prizes not to be missed: 2 visits backstage to one of the Telecom Italia Group advertisements.