Cellnex's revenues in 2016 grow by 15%, exceeding initial estimates by 23%

Broadcasting infrastructures (235 million) contribute 33%, while 12% (87 million) comes from the provision of network services.

Cellnex Telecom has presented the results corresponding to the end of the 2016 financial year. Revenues amounted to 707 million euros (+15%) and EBITDA reached 290 million (+23%), above estimates for the year that placed EBITDA growth between +15% and +20%. The comparable net result reached 40 million euros (+38%) compared to 29 million at the end of 2015.

Tobías Martínez, consejero delegado de Cellnex, ha valorado “la consistencia de unos resultados que cumplidos 20 meses desde la salida a Bolsa de Cellnex, nos han permitido cada trimestre cumplir con el compromiso que asumimos tanto en cuanto a crecimiento orgánico, como inorgánico”. En cuanto a la operativa del negocio, destaca como “los resultados de 2016, a perímetro constante, confirman un crecimiento interanual del +4% en el número de equipos (puntos de presencia) desplegados en los emplazamientos operados por Cellnex. Trimestre, tras trimestre hemos incrementado en más de 200 los equipos que hospedamos para nuestros clientes”. Esto se ha visto reflejado en la mejora del ratio de compartición que ha alcanzado un 1,62 por emplazamiento frente al 1,53 de 2015.

"This organic growth must also be projected on a perimeter that continues to expand, providing the company with greater potential. I find it relevant to highlight that the company has practically doubled its income in the last 4 years and expanded its presence to five countries, which represents a very relevant quantitative and qualitative change. This is a project in which its presence in different markets in which our clients also operate, and scale, constitute key factors for the sustainability of the business model," adds Martínez.

“Tan importante como ganar la dimensión y escala necesarias lo es la integración de este crecimiento en el día a día de la compañía, en los procesos de gestión, asegurando el cumplimiento y la calidad en el servicio a nuestros clientes. Junto al crecimiento inorgánico demostramos al mercado que somos capaces de seguir aprovechando el potencial de crecimiento orgánico de nuestra cartera de servicios”, sostiene el consejero delegado de Cellnex.

En relación a las operaciones de crecimiento realizadas durante el ejercicio, José Manuel Aisa, director financiero y de M&A de Cellnex Telecom, ha subrayado como “los 700 millones de euros invertidos en 2016 en Italia, Francia, Holanda y Reino Unido, junto a los 700 ya invertidos en 2015 en el portafolio de emplazamientos de WIND, y los 854 millones del reciente acuerdo firmado este 1 de febrero con Bouygues Telecom, dan cuenta del dinamismo que vive el sector en Europa. Es además una muestra del atractivo del modelo de operador neutro de infraestructuras y amplía la base de grandes proveedores de acceso a la red en Europa con los que Cellnex va asentando una colaboración y partenariado a largo plazo. Se suma a ello la alianza estratégica que acabamos de cerrar días atrás con JCDecaux para combinar nuestras capacidades en Italia y España aportando soluciones que aceleren el despliegue y densificación de tecnologías como los sistemas distribuidos de antenas (DAS) o las “small cells”, que en el futuro van a mejorar de modo decisivo la calidad y capacidad de la cobertura en banda ancha móvil en áreas urbanas y espacios con grandes aglomeraciones.”

Growth by business lines

By business lines, Telecommunications Services and Infrastructure contributed 55% of revenues with 385 million euros, a growth of 27% compared to 2015, reflecting the combination of organic growth and expansion of the perimeter.

Activity in audiovisual broadcasting infrastructures and services contributed 33% of revenues with 235 million euros, up 4.5% compared to 2015, already reflecting the positive impact of the incorporation of 6 new TV channels in Spain since the end of April 2016.

While the business focused on security and emergency networks and solutions for the intelligent management of urban infrastructures (IoT and Smart cities) contributed 12% of revenues with 87 million euros, +2% compared to the end of 2015.

As of December 31, 2016, Cellnex Telecom had a total of 16,828 sites (7,739 in Italy, 7,415 in Spain, 725 in Holland, 371 in France and 578 in the United Kingdom), to which are added the 1,072 nodes (DAS and Small Cells) managed by CommsCon in Italy and which have grown by +13% since the acquisition of the company in June 2016.

El crecimiento orgánico de los puntos de presencia en los emplazamientos a perímetro constante se situó en un +4,5% en relación al cierre de 2015, mientras que el ratio de clientes por emplazamiento alcanzó el 1,62x,al alza desde el 1,53x de diciembre de 2015 (un +6%). Ello es un reflejo de la actividad comercial, con el cierre de nuevos acuerdos de prestación de servicios con operadores de telefonía móvil y operadores de telecomunicaciones y grupos de comunicación audiovisual tanto en Italia como en España.

Investments during the period exceeded 700 million euros: 19 million correspond to the acquisition of CommsCon in Italy; 109 million for the purchase of the 261 Protelindo sites in Holland; 147 million for the 500 Bouygues Telecom towers in France; and 393 million allocated to the acquisition of Shere Group, which has provided 1,004 new locations (540 in the United Kingdom and 464 in the Netherlands).

78 million were applied to the maintenance of installed capacity, as well as to investments linked to the generation of new income and improvements in efficiency such as the improvement of operating costs due to the renegotiation of contracts related to the locations in which the mobile telephone infrastructure managed by the company is located, 995 renegotiations in 2016.

Debt structure

As of February 2017, Cellnex maintains a stable, long-term debt structure, with an average life of 7 years, an approximate average cost of 2%, and 86% referenced to a fixed rate. Cellnex Telecom's debt is not subject to any type of covenants.

On August 1, 2016, the company issued a Corporate Bond for 750 million euros maturing in January 2024 and a coupon of 2.375%. It was Cellnex's second issuance in the debt markets after the Bond issued in July 2015 for an amount of 600 million euros and maturing in 2022. In December 2016 Cellnex closed the private placement among qualified investors of a 16-year bond for 65 million euros and a coupon of 3.875%. This past January Cellnex issued a fourth bond for an amount of 335 million euros, a coupon of 2.875% and maturity in 2025.

“The combination of Cellnex's access to the capital market, treasury and available credit lines total availability as of February 2017 of 1.8 billion euros, and guarantees the company's execution capacity in the face of growth opportunities, extends the maturity profile of its debt and takes advantage of the current low interest rates, anticipating the upward movements that may occur,” says José Manuel Aisa, the company's financial director. Cellnex does not face significant maturities until 2022 when the bond issued in July 2015 matures.

The company's net debt as of December 31 reached 1,499 million euros compared to 927 million at the end of 2015, an increase of 572 million that reflects the growth operations closed in the year for an amount of 670 million. The annualized net debt/EBITDA ratio stood at 4.6x compared to 3.7x in December 2015. In this sense, José Manuel Aisa highlights the company's “capacity for deleveraging which, given the strong generation of cash flows, can reduce its debt, at constant perimeter, by a ratio of 0.6x each year.”

On March 30, 2016, Cellnex Telecom was added to the list of corporate bonds eligible as collateral by the European Central Bank in monetary policy operations. This action is part of the framework of the corporate debt purchase program (Corporate Sector Purchase Programme, CSPP), which on March 10, 2016 completed the financial asset acquisition program (Asset Purchase Programme, APP) previously deployed by the ECB.

Las emisiones de Cellnex Telecom mantienen el rating “investment grade” (grado de inversión) de Fitch (BBB- con perspectiva estable), confirmado por la propia agencia días atrás después de informar de las nuevas inversiones previstas en Francia. Asimismo el pasado 15 de febrero S&P confirmó el “rating BB+ con perspectiva también estable.

Perspectivas 2017

Beyond the operations that imply an expansion of the group's consolidation perimeter – such as the agreement reached this February with Bouygues Telecom and whose visibility in 2017 will still be limited taking into account the execution horizon of 2 years (incorporation of 1,800 sites) and 5 years (construction of 1,200) –, the forecasts for 2017 based on the current perimeter point to a growth in free cash flow recurring above 10%, while EBITDA will be in a range between 330 and 340 million euros. The dividend will grow 10% compared to 2016.

Regarding the axes of Cellnex Telecom's organic growth, it will focus on a rationalization of redundant sites (up to 2,000 between 2016 and 2019), construction in coordination with network access operators of new sites in areas that require it (up to 2,200 in the period 2016-2021); and an annual growth in the number of points of presence (PoPs) in the company's locations – at constant perimeter – by 3%-4% in the period 2016-2019.