Cellnex H1 2023 revenue exceeds EUR 2 billion

Results January-June 2023

EBITDA growth (+16%) and recurring free cash flow (+16%) driven by the combination of organic growth (+7.1%) and consolidation of geographic footprint

Strengthening in key markets: Signed new industrial agreements with SFR and Bouygues Telecom in France, and acquired full control of OnTower Poland, which manages and operates sites for Play Communications

• The main indicators[1] reflect the strength of the organic business and consolidation of the Group’s geographic footprint:
  • Revenue[2] stood at EUR 2.001 billion (EUR 1.795 billion excluding energy pass-throughs), compared with EUR 1.69 billion 1H 2022 (EUR 1.538 excluding pass-throughs); adjusted EBITDA was EUR 1.49 billion (vs 1.282 billion 1H 2022); and Recurring Leveraged Free Cash Flow was EUR 741 million (vs 637 million 1H 2022).
  • Solid organic growth: +7.1% of points of presence (PoPs) in the Group’s sites.
• The Company reiterates its commitment to achieve a positive free cash flow (break even by the end of 2023) and to secure investment grade rating by S&P by 2024 at the latest. It also confirms the medium-term outlook up to 2025.
• Focus on organic growth, CAPEX discipline and efficiencies, confirmed.
• Net financial debt[3] as of June 2023 amounts to EUR 17.9 billion. 76% of the debt is at a fixed rate.
• Cellnex closed a loan of EUR 315 million with the European Investment Bank to finance the deployment of 5G infrastructure in Spain, Portugal, France, Italy and Poland.
• As of June 2023, Cellnex has available liquidity (cash and undrawn facilities) of EUR c.3.7 billion.
• The Company has received the classification of ‘Industry Top Rated’ by Sustainalytics ESG Risk Rating, consolidating its position among the top 1% companies in the telecommunications sector and 4% globally, for ESG.

Barcelona, 27 July 2023. Cellnex Telecom has presented its results for the first half of 2023. Revenue increased 17% compared to 1H 2022 (+18,4% including pass-throughs, i.e. revenues from re-invoicing energy to customers). Adjusted EBITDA grew to EUR 1.49 billion (+c.16%), reflecting both organic growth and the consolidation of the Company’s geographic footprint. Recurring Leveraged Free Cash Flow was EUR 741 million (+c.16%) and the FCF, EUR -130 million vs. EUR -739 million in 1H 2022, a 82% improvement.

Amortisations (+16% vs. 1H 2022) and financial costs (+13% vs. 1H 2022), both associated with the process of consolidation and integration in the Group of the acquired assets, resulted in a negative net accounting result at EUR -193 million (vs. EUR -170 million in 2022).

Cellnex CEO Marco Patuano commented on the results: “We continue to see momentum in the business with strong growth across all of our industrial and financial metrics in the first half of the year. We are making good progress towards the objectives we set last November in the “new chapter” for the Group, with a focus on organic growth, positive free cash flow generation by 2024 and achieving investment grade by 2024 as well.”

“All our strategic pillars –focus on organic growth, CAPEX discipline and efficiencies–, are confirmed” said Patuano.

Strengthening in core markets

Cellnex has bolstered its position in France, by extending its industrial agreements with SFR and Bouygues Telecom, and in Poland, where it now controls 100% of OnTower Poland.

• Reinforcing our existing partnership by meeting SFR’s need to deploy new PoPs on existing and new sites, with a long-term service provision contract for a 20-year period from the starting date of each new PoP and all-or-nothing renewal. This agreement is associated to an investment over a 6-year period of up to EUR 275 million and, once deployed, are expected to generate annual EBITDA of EUR 35 million.

• With Bouygues Telecom, Cellnex has agreed to extend the fibre-to-the-tower (FTTT) project roll-out initiated in 2020 through Nexloop, extending the service provision contract until 2050, extendible for successive additional periods of 5 years (2050+5+5). The agreement also includes building up to 65 new metropolitan offices designed to house data processing centres (Edge Computing). These agreements are associated to an investment over a 6-year period of up to EUR 275 million and, once deployed, are expected to generate annual EBITDA of EUR 30 million.

• In Poland, a market in which the Company operates both passive and active infrastructure, Cellnex now controls 100% of the subsidiary through which it manages and operates the sites of the mobile operator Play, as announced on 30 June. Iliad sold its 30% stake to Cellnex for EUR 510 million (c.18x EBITDAaL). OnTower Poland currently operates a total of 8,500 sites in Poland and plans to roll out up to around 3,400 new sites by 2030. The company has a 20-year service provision contract with Play, extendible for additional successive ten-year periods.

Business lines and main indicators for the period

• Infrastructure Services for mobile Telecommunications operators (TIS business) provided 1% of revenue, at EUR 1.824 billion, representing a year-on-year increase of 19.3%.
• Broadcasting infrastructure activity contributed 8% of revenue, with EUR 115 million.
• The business focused on security and emergency service networks and solutions for smart urban infrastructure management (IoT and Smart cities) contributed 1% of revenue, totalling EUR 62 million.
• As of 30 June, Cellnex had a total of 112,737 operational sites (without taking into account the 16,060 sites planned to be rolled out by 2030): 25,181 in France, 21,743 in Italy, 15,736 in Poland, 12,558 in the United Kingdom, 10,465 in Spain, 6,464 in Portugal, 5,434 in Switzerland, 4,564 in Austria, 4,088 in the Netherlands, 2,955 in Sweden, 1,947 in Ireland and 1,602 in Denmark; along with 8,541 DAS nodes and small cells.
• Organic growth of the points of presence at the sites was 1% higher than the same period of 2022, with 4.1% coming from new co-locations in existing sites, with a total of 2,741, and 3% from the roll-out of 2,220 new sites during this period.
• Total investments in the first half of 2023 amounted to EUR c. 1.5 billion, mainly for the deployment of the ongoing BTS programmes in several countries (709 million) and the purchase of 30% of On Tower Poland (EUR 510 million).
• The FCF for the 1H 2023 was EUR -130 million EUR -739 million in 1H 2022.

Financial structure

Cellnex has a debt structure marked by the flexibility provided by various instruments.

• Group net debt —as of June 2023, excluding lease liabilities— stood at EUR 17.9 billion. 76% of the debt is at a fixed rate.
• In July, the company closed a loan of 315 million euros with the European Investment Bank to finance the roll-out of 5G infrastructure in Spain, Portugal, France, Italy and Poland.
• As of June 2023, Cellnex had access to immediate liquidity (cash and undrawn facilities) of approximately EUR 3.7 billion.
• Cellnex issues maintain their “investment grade” rating from Fitch (BBB-) with a stable outlook, as confirmed in February. In turn, S&P maintains the BB+ rating with a positive outlook confirmed in April.

Outlook for 2025

Cellnex reiterates the outlook announced for 2025 with revenue of EUR 4.1 – 4.3 billion, EBITDA of EUR 3.3 – 3-5 billion and free and recurring cash flow of EUR 2.0 – 2.2 billion.

About Cellnex Telecom

The efficient deployment of next-generation connectivity is essential to drive technological innovation and accelerate inclusive economic growth. Cellnex is the independent wireless telecommunications and broadcasting infrastructures operator that enables operators to access Europe’s most extensive network of advanced telecommunications infrastructures on a shared-use basis, helping to reduce access barriers for new operators and to improve services in the most remote areas.

Cellnex manages a portfolio of around 135,000 sites –including forecast roll-outs up to 2030– in Spain, Italy, the Netherlands, France, Switzerland, the United Kingdom, Ireland, Portugal, Austria, Denmark, Sweden and Poland. 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 100 indices. It is also present in the main sustainability indexes, such as CDP, Sustainalytics, FTSE4Good and MSCI. Cellnex’s reference shareholders include Edizione, TCI, GIC, CPP Investments, Blackrock, CK Hutchison, CriteriaCaixa and Norges Bank.

[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