Cellnex’s 9M revenue exceeds EUR 3 billion

January-September 2023 results

Strong EBITDA growth (+16%) driven by organic growth (+6.8%) and consolidation of geographic footprint

Achieved positive free cash flow in the first nine months of the year and anticipates positive FCF by the end of 2023, ahead of the planned 2024 timeframe

Cellnex reduced net debt by EUR 300 million compared to the end of H1, and reiterates the commitment to obtain S&P investment grade rating by 2024 the latest

• The main indicators[1] reflect the strength of the organic business and consolidation of the Group’s geographic footprint:
  • Revenue[2]: EUR 3,008 million (vs. 2,572 million 9M 2022).
    • EUR 2,713 million excluding energy pass-throughs (vs. 2,336 million 9M 2022) +16%
  • Adjusted EBITDA: EUR 2,248 million (vs. 1,937 million 9M 2022) +16%
  • Free Cash Flow (FCF): EUR 436 million (vs -774 million 9M 2022).
  • Strong organic growth: +6.8% of points of presence (PoPs) in the group’s sites.
• The Company adjusts its short term guidance upwards (for FCF) and confirms medium-term guidance up to 2025.
• Net financial debt[3] stands at EUR 17.6 billion of which 75% is at a fixed rate.
• Cellnex has available liquidity (cash and undrawn debt) of approximately EUR 4.6 billion.
• The Board has approved a dividend payment of € 0.04035 per share, charged to the share premium reserve, which will be effective on 23 November.

Barcelona, 10 November 2023. Cellnex Telecom has presented its results corresponding to the first nine months of 2023. Revenue grew 16% compared to the first nine months of 2022 (17% including pass-throughs, i.e. revenues from re-invoicing energy to customers).

Adjusted EBITDA grew to EUR 2,248 million (+16%), reflecting both organic growth and the consolidation of the Company’s geographic footprint. Free cash flow was EUR 436 million vs -EUR 774 million in the same period of the previous year, mainly due to the effect of the sale of sites in France, in accordance with the remedies stipulated by the French Competition Authority following Cellnex’s purchase of Hivory in 2021.

Amortizations (+9% vs 9M 2022) and financial costs (+15% vs 9M 2022), both associated with the acquired assets of the Group, resulted in a negative net accounting result at EUR -198 million (vs EUR -255 million in 2022).

Marco Patuano, CEO of Cellnex, highlighted “This period has been marked by excellent commercial performance and consistent operational execution, with revenues and EBITDA well on track and our free cash flow turning positive earlier than anticipated. Once again, we are confirming all our short and medium term financial targets including achieving positive FCF by the end of the year, ahead of the planned 2024 timeframe, thanks to a strict control of CAPEX expenditure. We are making good progress on reducing debt thanks to the disposal of sites in France and the recent deal in the Nordics”.

Marco Patuano added “We are introducing a new organizational model fully aligned with our Next Chapter objectives and enabling commercial and operational excellence”.

Asset disposals aimed at debt reduction

Cellnex concluded the sale in France of 2,353 sites to Phoenix Tower International (PTI) and the joint venture comprising PTI and Bouygues Telecom in accordance with the remedies stipulated by the French Competition Authority following Cellnex’s purchase of Hivory in 2021. Cellnex received EUR 631 million for the sale of these assets, to which it plans to add an additional EUR 360 million –after completing the transfer of the approximately 870 remaining sites– in 2024.

Likewise, in July, it reached an agreement with Stonepeak for the sale of a 49% stake in Cellnex Sweden and Cellnex Denmark for EUR 730 million –equivalent to a multiple of 24x 2024E EBITDAaL– which it expects to conclude during the first quarter of 2024.

Today, as part of this strategy of focusing on tower-based activities and businesses (core business) and their adjacent assets, Cellnex has announced an agreement with Boldyn Networks to which it will sell its private networks business unit, mainly comprising Edzcom, the Group’s Finnish subsidiary specialized in connectivity solutions for private networks in industrial complexes and environments. The operation is expected to conclude during the first quarter of 2024.

In parallel, Cellnex continues to evaluate the possibility of monetizing other assets to crystallise value and speed up the process to achieve S&P investment grade.

Financial structure

• The Group’s net debt –excluding lease liabilities– stands at EUR 17.6 billion (vs. 17.9 billion in the first half of the year). 75% of the debt is at a fixed rate.
• In July, the company concluded the issue of a convertible bond for EUR 1 billion maturing in 2030 to buy back a convertible bond of 800 million maturing in 2026, thereby extending debt maturities, increasing the conversion price and reducing dilution in terms of FCF per share.
• Cellnex currently has access to immediate liquidity (cash and undrawn debt) to the tune of approximately EUR 4.6 billion.
• The company has no debt maturing in 2023 and plans to cover the expected debt maturities for 2024/2025 (approximately EUR 2.6 billion) with available cash and cash-in from additional divestments. Starting in 2027, Cellnex will generate a solid FCF allowing it to finance 100% of its debt.
• Cellnex issues maintain their “investment grade” rating from Fitch (BBB-) with a stable outlook. In turn, S&P maintains the BB+ rating with a positive outlook.

Business lines and main indicators of the period

• Infrastructure Services for mobile Telecommunications operators (TIS business) provided 91.1% of revenue, at EUR 2,739 million, representing a year-on-year increase of 17.6%.
• Broadcasting infrastructures activity contributed 5.7% of revenue, at EUR 173 million.
• The business focused on security and emergency service networks and solutions for smart urban infrastructure management (MCPN and IoT businesses and Smart cities) contributed 3.2% of revenue, totalling EUR 96 million.
• As of 30 September, Cellnex had a total of 111,688 operational sites (without taking into account the 518 sites planned to be rolled out by 2030): 23,166 in France, 21,944 in Italy, 15,917 in Poland, 12,937 in the United Kingdom, 10,528 in Spain, 6,495 in Portugal, 5,446 in Switzerland, 4,584 in Austria, 4,094 in the Netherlands, 3,002 in Sweden, 1,963 in Ireland and 1,612 in Denmark, along with 9,125 DAS nodes and small cells.
• Organic growth of the points of presence at the sites stood at +6.8% in relation to the same period of 2022, 3.6% of which came from new co-locations at existing sites, totalling 3,323, with Portugal and Italy standing out in this area, and 3.2% coming from the deployment of 3,159 new sites in the period, thanks mainly to the progress of BTS (Built-to-Suit) programmes in France, Italy and Poland.

Year-end outlook

Cellnex confirms its outlook for the end of the year and plans to close 2023 with revenue between EUR 4 and 4.1 billion (adjusting the forecast revenue to lower expected pass-through due to lower electricity prices), EBITDA of 2,950 – 3,050 million and free and recurring cash flow of between 1,525 – 1,625 million. 

The company has adjusted its Free Cash Flow (FCF) outlook upwards from “neutral” to “positive” (between 100 and 150 million), thereby achieving its commitment to achieve a positive FCF initially planned for 2024 during the course of 2023.

[1] Excel background document available at www.cellnex.com

[2] Corresponds to Operating Income excluding Advances delivered to customers. See consolidated financial statements corresponding to the period ending 30 June 2023.

[3] Excluding lease liabilities