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  • 14 Nov 2019
  • ·
  • Finance

Cellnex revenues up 13% and EBITDA up 13% in first nine months of 2019

Results January-September 2019

The Company completed its second capital increase of the year in Q3 – worth € 2.5 billion – which was oversubscribed by 38 times  

Up to October 2019, Cellnex has announced acquisitions in Italy, France, Switzerland, Ireland and the UK, totalling € 6.8 billion in investments, reinforcing its leading position in Europe

  • Key indicators continue to reflect the combined effect of a larger geographic footprint and strong organic business drivers:
    • Revenues stood at € 753 million ( 665 million); EBITDA at € 498 million (vs. € 439 million) and recurring free cash flow € 257 million (vs. € 230 million).
    • Points of presence (PoPs) grew c.25% with the new acquisitions.+5% like-for-like.
    • The roll-out of new DAS (distributed antenna systems) nodes and Small Cells grew c.20% in relation to the same period in 2018.
    • The backlog – contracted future sales, including acquisitions pending completion in Italy, France, and UK stands at € 38 billion.
    • Cellnex raised its outlook for FY 2019 with forecast EBITDA between €680 and 685 million (vs. € 640-655 million) and a recurring free cash flow growth of over 10%.
  • Net debt as of 30 September 2019 amounted to € 3.4 billion. 70% is at a fixed rate, the average cost of debt (drawn down) is 7% and the average life is 5.8 years. As of November 2019, Cellnex has liquidity (cash and undrawn debt) of € 9.1 billion.
  • The Board has approved a dividend payment of €0.03842, charged to the share premium reserve, which will become effective on November 22.

Barcelona, 14 November 2019. Cellnex Telecom has released its results for the first nine months of 2019. Revenues stood at € 753 million (+13%) and EBITDA was €498 million (+13%). The net result closed at € -12 million (vs. € -26 million in 3Q 2018) reflecting the effect of higher amortisation (+14% vs. 3Q 2018) and financial costs (+48% vs. 3Q 2018) associated with the group’s growth activities, including the expansion of its geographical footprint.

“Once again Cellnex has recorded a set of indicators that reflect, as they will again in the coming quarters, the expansion of the group’s position in Europe. It is proving to be an exceptional year in terms of transformational operations,  with acquisitions in Italy, France, Switzerland, Ireland and the United Kingdom announced this year, totalling over € 6.5 billion in investment. The Company also completed two capital increases this year, totalling € 3.7 billion, reinforcing the Company’s balance sheet, guaranteeing an adequate balance between debt and equity, and demonstrating the degree of trust in and attractiveness of Cellnex’s project among investors. This trust demands that the management team be even more exacting and responsible,” said CEO Tobias Martinez.

“Meanwhile, the development of the Company’s organic indicators, mainly points of presence or customer ratios per location, is outstanding. Cellnex continues to boast levels of growth ranging from 3% to 5% like-for-like which, together with the backlog of € 38 billion, highlights the predictability and recurrence of the Company’s cash flows.”

Business lines. Main indicators for the period

Infrastructure services for mobile telecommunications operators contributed to 67% of total revenues, to the tune of €506 million, representing an increase of 17%  with regard to September 2018.

Activity in broadcasting infrastructures contributed 23% of revenues, at €176 million.

The business focused on security and emergency service networks and solutions for smart urban infrastructure management (IoT and Smart cities) contributed 10% of revenues, totalling € 71 million.

As of 30 September, 50% of revenue and 59% of EBITDA were generated outside the Spanish market. Italy is the second largest market, accounting for 26% of revenues.

As of  30 September 2019, Cellnex had a total of 27,698 operative sites (8,684 in Spain,  8.336 in Italy 3,343 in France, 919 in the Netherlands, 608 in the United Kingdom, 548 in Ireland, and 5.260 in Switzerland), with a further 1,777 nodes (DAS and Small Cells).

It is worth noting that the number of DAS and Small Cells sites grew by approximately 20% in comparison to the same period in 2018.

Like-for-like organic growth of points of presence in sites was up 5% year on year, while the customer ratio per site (excluding changes to the perimeter) was up by 3%. 

Total investments executed in the first nine months of 2019 amounted to € 1.546 billion, mostly for investments linked to generating new revenue streams, particularly the incorporation of new assets in Switzerland, Ireland and the UK and the continuity in the integration and roll-out of new sites in France, as well as improvements in efficiency, and the maintenance of installed capacity.

2019, a year of transformational growth

In the first nine months of 2019 Cellnex struck several agreements to acquire assets and companies which, once signed and with all the associated programme for the construction of new sites rolled out, will mean an increase of some 24,000 assets in the current portfolio in the seven European countries in which the company is present.

In the first half of 2019, Cellnex signed long-term strategic collaboration agreements with Iliad in France and Italy and with Salt in Switzerland to acquire 10,700 sites (5,700 in France, 2,200 in Italy and 2,800 in Switzerland) and roll out a construction programme (BTS) of 4,000 new sites up to 2027 (2,500 in France and 1,000 in Italy for Iliad, and 500 for Salt in Switzerland). With a total planned investment of close to € 4 billion (€ 2.7 billion for the acquisition of sites and 1.350 for BTS programmes).

In June Cellnex and BT announced that they had signed a long-term strategic collaboration agreement through which Cellnex acquired the operation and marketing rights of 220 tall telecoms towers in the UK.

In September Cellnex announced the acquisition of Cignal in Ireland, one of the main Irish telecommunications infrastructure operators, for a total of € 210 million. Cignal operates 546 sites in Ireland, which is now the seventh European country in which Cellnex has started operating. Furthermore, the Company expects to roll out another 600 new sites up to 2026, with an additional investment estimated at € 60 million.

In October, the Company announced the agreement to acquire Arqiva’s telecommunications division for around £ 2 billion. The transaction includes 7,400 owned sites and acquiring the marketing rights of some 900 sites in the United Kingdom. It also includes concessions for the use of urban fixtures for the deployment in 14 districts of London for telecommunications infrastructure, a key resource for the densification and roll-out of 5G. The finalisation of the operation – subject to the competition authorities obtaining the corresponding administrative authorisations, and other supensive conditions – is planned for the second half of 2020.

Since the IPO in 2015, Cellnex has executed or committed investments worth around € 10.8 billion for the acquisition or construction – by 2027 – of up to 42,700 telecommunications infrastructures in addition to the approximately 10,000 that the Company had at that time.

Two capital increases to reinforce the balance sheet and growth

Cellnex increased its own resources by € 3.7 billion in 2019 – to finance the company’s growth – through two capital increases, one of € 1.2 billion performed in March and more recently € 2.5 billion on 31 October of this year, for which demand for shares greatly exceeded supply (by over 16 and 38 times respectively) and supported by almost all the holders of preemptive rights.

 

Debt structure

Cellnex closed the first nine months of 2019 with a debt structure marked by the flexibility provided by the various instruments that were used: low cost and high average life.  The average life of this debt is 5.8 years, the approximate average cost is 1.7% (debt drawn),and 70% at a fixed rate.

The Group’s net debt as of 30 September stood at € 3.4 billion compared to € 3.166 billion at the close of 2018.

Likewise, in November Cellnex had access to immediate liquidity (cash & undrawn debt) to the tune of approximately € 9.1 billion.

Cellnex Telecom’s bond issues maintain their “investment grade” rating from Fitch (BBB- with a stable outlook), confirmed by this agency in November 2019. For its part, S&P maintains the BB+ rating with stable perspective confirmed by the agency in October 2019.

 

Outlook for 2019: Upward revision

As a result of the agreements closed with Salt in Switzerland, with BT in the United Kingdom and with Cignal in Ireland – as part of the progressive expansion of the company’s perimeter -, Cellnex has revised its outlook upwards for the whole of YF 2019 with EBITDA now forecast at between € 680 and 685 million (vs the € 640-655 million range previously expected) and a recurring free cash flow growth of over 10%.

About Cellnex Telecom

Cellnex Telecom is Europe’s leading operator of wireless telecommunications and broadcasting infrastructures with a projected portfolio of 53,000 sites including forecast roll-outs up to 2027. Cellnex operates in Spain, Italy, Netherlands, France, Switzerland, the United Kingdom and Ireland

Cellnex’s business is structured in four major areas: telecommunication infrastructures 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, CDP (Carbon Disclosure Project), Sustainalytics and “Standard Ethics” sustainability indexes.

Cellnex’s reference shareholders include ConnecT, with a 29.9% stake in the share capital, as well as CriteriaCaixa, Blackrock, Wellington Management Group and Canada Pension Plan, holding smaller stakes.

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