Cellnex Telecom reports growth of 15% in revenues and 20% in EBITDA during Q1 2018

Results January-March 2018

The Board of Directors will propose to increase the number of directors from 10 to 12, appoiting two new independent female directors, during the next Shareholers’ Meeting

• All key indicators improved consistently in relation to Q1 2017:
• Points of presence (PoPs) grew 24% with the new acquisitions (+4% like-for-like). The customer ratio per site increased 3% like-for-like.
• The roll-out of new DAS (distributed antenna systems) nodes grew 20% in relation to the first quarter of 2017.
• 51% of the plan for rationalising (dismantling) 2,000 sites in the period 2016-2019 is under way and contracted.
• The target of 2,200 sites to be built up to 2021 for the Company’s customers are already committed.
• Revenue stood at € 217 million; EBITDA € 101 million; comparable net result € 11 million; and recurring free cash flow € 78 million.
• The backlog of future sales, standing at € 16,000 million, equivalent to 20 years’ income.
• In the first quarter, the company provisioned € 55 million corresponding to the voluntary early retirement and voluntary redundancies plan agreed in Retevisión and Tradia for the period 2018-2019.
• Net debt as of 31 March amounted to € 2,281 million, with an annualised debt/EBITDA ratio of 5,6x. 79% is at a fixed rate, the average cost of debt (drawn down) is 2% and the average life is 6.1 years.
• In March 2018 Cellnex had immediate liquidity (cash and banks plus available credit lines) of € 1,826 million.
• The Board of Directors agreed to hold the Ordinary General Shareholders’ Meeting on 31 May in Madrid.

Barcelona, 27 April 2018. Cellnex Telecom has presented its results for the first quarter of 2018. Revenues amounted to € 217 million (+15%) and EBITDA was € 101 million (+20%). The comparable net result closed at € 11 million, in line with the close of the same period in 2017, thereby taking into account the effect of the higher amortisations (+30% vs. 1Q 2017) and financial costs (+51% vs. 1Q 2017) associated with the growth of the group and the consequent expansion of its geographical footprint. Furthermore, Cellnex has provisioned € 55 million corresponding to the voluntary early retirement and voluntary redundancies plan agreed in March in Retevisión and Tradia for the period 2018-2019. This provision has a non-recurring impact on the results of the quarter.

“This first quarter of 2018 demonstrates Cellnex continued delivery of double-digit growth in revenues, EBITDA and free and recurring cash flow, which reflects the expansion of our geographical footprint, which is significant in relation to the same quarter of 2017, including the positive impact of the integration of new Bouygues assets in France, of Sunrise in Switzerland and Alticom in the Netherlands. It also reflects the consistency of the like-for-like organic growth, which continues at a solid 4% increase in equipment deployed at our sites, as well as a +3% in the customer ratio, also by location” said Tobias Martinez, President and Chief Executive Officer of Cellnex.

“The strength and consistency of organic gwth” continued Tobias Martinez, “responds to the increased equipment in the sites acquired in recent years, which have diversified and expanded our business, not only in terms of markets and countries, but also in terms of our customer base. This, coupled with the predictability offered by the backlog of future sales, standing at € 16,000 million, equivalent to practically 20 years’ income, reflects the resilience of Cellnex’s fundamentals.”

Business lines. Main indicators for the period

Telecommunications Services and Infrastructures provided 64% of total revenue with € 139 million, an increase of 28% over March 2017.

Activity in broadcasting infrastructures contributed 27% of income, with € 58 million.

The business focused on security and emergency service networks and solutions for smart urban infrastructure management (IoT and Smart cities) contributed 9% of revenue, totalling € 19 million.

As of 31 March, 47% of income and 50% of EBITDA were generated outside the Spanish market. Italy is the second largest market, accounting for 29% of revenues.

As of 31 March 2018, Cellnex had a total of 21,757 sites (7,990 in Italy, 8,136 in Spain and 5,631 in the Netherlands, France, the UK and Switzerland), with a further 1,363 nodes (DAS and Small Cells).

It should be noted that the number of DAS and Small Cells sites grew by 20% in comparison to the first quarter of 2017.

Like-for-like organic growth of points of presence in sites stood at 4% in relation for the same period in 2017, while the customer ratio per site (excluding changes to the perimeter) was up 3%.

Operative investments in the first three months of 2018 stood at € 37 million, applied principally to maintaining installed capacity and to investments linked to generating new revenues and improving efficiency.

Debt structure

Cellnex closed the first quarter of 2018 with a stable long-term debt structure, with an average life of 6.1 years, an average cost of approximately 2,2% (debt drawn down), and 79% at a fixed rate.

On 8 January Cellnex made its first convertible bond issue for an amount of € 600 million. The Bonds, with a nominal amount of € 100,000, have a maximum expected maturity date of 16 January 2026 and will carry a coupon of 1.5% per annum. The price of conversion was set at € 38.0829, with a premium of 70% on the weighted average price by volume of listing of the share on the day of issuance.

The shares underlying the bonds are equivalent to 6.8% of Cellnex’s capital prior to the issue.

The company’s net debt as of March 31 was € 2,281 million compared to € 2,237 million at the close of 2017, equivalent to a net debt / EBITDA ratio of 5.6x. Likewise, at the close of March Cellnex had access to immediate liquidity (cash and banks + debt not drawn down) to the tune of around € 1,826 million.

Cellnex Telecom’s bond issues maintain their “investment grade” rating from Fitch (BBB- with a negative outlook), confirmed by the agency itself last September, just as S&P confirmed the “BB+ rating with a stable outlook.

Enlargement of the Board from 10 to 12 members and proposal to appoint two new independent female directors

The Board will propose to the Shareholders Meeting to be held in Madrid on 31 May that the number of directors be increased from ten to twelve. Likewise, in a proposal from the Appointments and Remuneration Committee, it has agreed to submit to the Company’s Shareholders’ Meeting the appointment of Anne Bouverot and María Luisa Guijarro as new independent directors of the company.

Following the passing of these proposed appointments, Cellnex’s Board will have seven independent directors, representing nearly 60% of the total, which is above the recommendations of Good Corporate Governance for Listed Companies. Likewise, with the appointment of two new female directors, Cellnex will continue to increase gender diversity in its highest corporate governance body. With three female directors in total, women will comprise 25% of the Board.

Anne Bouverot was CEO of Morpho, a biometrics and cybersecurity company (between 2015 and 2017) and general director of the GSMA (between 2011 and 2015). Previously, she held several international management positions in companies in the telecommunications sector such as France Telecom / Orange (Executive Vice President of Mobile Services from 2009 to 2011), Global One Communications and Equant. She is currently an Independent Board member of Capgemini and Edenred in France. Anne Bouverot has a degree in Mathematics and a PhD in Artificial Intelligence from the École Normale Supérieure in Paris, and a degree in Telecommunications Engineering from Mines Paris Tech.

María Luisa Guijarro Piñal has worked most of her career in the Telefónica group, from 1996 until 2016, where she held positions including Global Marketing and Sponsorship Manager, CEO of Terra España, Director of Marketing and Business Development in Spain and, in her later years at the company, member of the Executive Committee in Spain as head of Strategy and Quality. Ms. Guijarro has a degree in Economics from the Autonomous University of Madrid.

About Cellnex Telecom

Cellnex Telecom is Europe’s leading operator of wireless telecommunications and broadcasting infrastructures with a total portfolio of 28,000 sites including forecast roll-outs up to 2023. Cellnex operates in Spain, Italy, Netherlands, France, Switzerland and the United Kingdom.

Cellnex’s business is structured in four major areas: telecommunications infrastructure services; audiovisual broadcasting networks, security and emergency service networks and solutions for smart urban infrastructure and services management (smart cities and the “Internet of Things” (IoT).

The company is listed on the continuous market of the Spanish stock exchange and is part of the selective IBEX 35 and EuroStoxx 600 indices. It is also part of the FTSE4GOOD and CDP (Carbon Disclosure Project) sustainability indexes and the Standard Ethics index, with an EE- rating (compliant) with stable outlook.