Helios Towers PLC · LSE:HTWS
Helios Towers — H1 2023 Earnings Presentation
34 slides from Helios Towers's earnings presentation, Aug 3, 2023
Slide 1: H1 2023 Results
Executing H1 2023 Results on 2023 goals; guidance tightened 3 August 2023 upwards
Slide 2: Helios Towers team
Helios Towers team Manjit Dhillon Tom Greenwood Chris Baker-Sams Chief Financial Officer Chief Executive Officer Head of Strategic Finance and Investor Relations Helios Towers H1 2023 Results 2
Slide 3: Agenda
Agenda 1. Highlights 2. Financial Results 3. Q&A Helios Towers H1 2023 Results 3
Slide 4: Highlights
Highlights Helios Towers H1 2023 Results 4
Slide 5: Highlights
HIGHLIGHTS FINANCIAL RESULTS Highlights Record tenancy additions, accelerating organic growth and reducing leverage; FY 23 guidance tightened upwards across key KPIs 1 2 3 STRONG RECORD FY 23 GUIDANCE FINANCIAL PERFORMANCE TENANCY GROWTH TIGHTENED UPWARDS • +32% YoY H1 revenue growth • +3,176 (+30%)
Slide 6: Robust growth on key metrics
HIGHLIGHTS FINANCIAL RESULTS Robust growth on key metrics Leadership positions in high-growth markets, proven business model and consistent operational execution driving performance Adj. EBITDA Portfolio free cash flow Return on invested capital(5) (US$m) (US$m) (%) Adj. EBITDA Margin Cash conversio
Slide 7: Group ROIC reflects mix of established vs. new markets
HIGHLIGHTS FINANCIAL RESULTS Group ROIC reflects mix of established vs. new markets Established markets yielding c.16% ROIC (and growing) with new markets, entered into across 2021-22, expected to deliver comparable returns as tenancy ratio expands Established markets New markets (Tanzania, DRC, Con
Slide 8: New markets demonstrating lease-up potential to support Adjusted EBITDA and ROIC growth
HIGHLIGHTS FINANCIAL RESULTS New markets demonstrating lease-up potential to support Adjusted EBITDA and ROIC growth Market Sites Tenancy ratio Q2 23 Ann. Adj. EBITDA(1) CAGR Senegal 1,386 1.1x $25m +14% (Closed: Q2 2021) (1,207) (1.0x) ($19m) Madagascar 562 1.2x $6m +16% (Closed: Q4 2021) (490) (1.
Slide 9: Sustainable Business Strategy
HIGHLIGHTS FINANCIAL RESULTS Sustainable Business Strategy Continued progress on key impact areas of digital inclusion, climate action, developing local talent and responsible governance Committed to the highest levels of transparency Solid progress on all Sustainable Business KPIs Mgmt. ‘AAA’ from
Slide 10: Financial Results
Financial Results Helios Towers H1 2023 Results 10
Slide 11: H1 2023: Financial overview
HIGHLIGHTS FINANCIAL RESULTS H1 2023: Financial overview YoY QoQ In US$m, unless H1 22 H1 23 % change Q1 23 Q2 23 % change otherwise stated Revenue 265 350 +32% 171 179 +5% Adj. EBITDA(1) 136 174 +28% 85 89 +5% Adj. EBITDA margin (%) 51% 50% -1% 50% 50% - Portfolio free cash flow(2) 100 125 +24% 58
Slide 12: Q2 2023: Consistent and strong tenancy growth
HIGHLIGHTS FINANCIAL RESULTS Q2 2023: Consistent and strong tenancy growth Sites Tenancies Tenancy ratio +5% +30% +10% +26% +0.08x -0.05x 25,883 13,870 3,192 1.92x 1.87x 2,519 20,549 10,694 10,357 1.27x 8,845 4,560 5,002 1.94x 2.07x 6,349 11,704 12,334 6,134 1.91x 1.94x Q2 22 Q2 23 Q2 22 Q2 23 Q2 22
Slide 13: Q2 2023: Accelerating organic growth
HIGHLIGHTS FINANCIAL RESULTS Q2 2023: Accelerating organic growth Revenue (US$m) Adj. EBITDA (US$m) Adj. EBITDA margin (%) +30% +15% +28% +20% 179 89 14 9 138 69 86 41 73 37 50% 50% 79 41 49 65 -8 -10 Q2 22 Q2 23 Q2 22 Q2 23 Q2 22 Q2 23 • Organic revenue growth driven by • Adj. EBITDA growth across
Slide 14: Q2 2023: Proven resilience to Fx, CPI and power prices
HIGHLIGHTS FINANCIAL RESULTS Q2 2023: Proven resilience to Fx, CPI and power prices Q2 23 YoY revenue walkthrough(1,2) Q2 23 YoY Adj. EBITDA walkthrough(1) (US$m) (US$m) +30% +28% 14 9 7 (5) 4 (2) 11 0 9 14 Principally driven by CPI escalations more than Ghanaian Cedi 179 89 offsetting Fx impacts mo
Slide 15: Diversified business underpinned by long-term contracts with blue-chip MNOs
HIGHLIGHTS FINANCIAL RESULTS Diversified business underpinned by long-term contracts with blue-chip MNOs Diverse, quality customer base Robust hard-currency revenues Geographically diverse revenues H1 23 revenue breakdown by customer H1 23 revenue breakdown by FX H1 23 revenue breakdown by segment L
Slide 16: Strong portfolio free cash flow, reinvested into platform expansion
HIGHLIGHTS FINANCIAL RESULTS Strong portfolio free cash flow, reinvested into platform expansion Management cash flow Commentary ($m) H1 22 H1 23 • Portfolio free cash flow of $125m, largely covering Adj. EBITDA 136 174 Non-discretionary capex (9) (18) interest expense ($60m) and discretionary capex
Slide 17: Updated FY 2023 capex is tightly controlled and focused on accretive organic opportunities
HIGHLIGHTS FINANCIAL RESULTS Updated FY 2023 capex is tightly controlled and focused on accretive organic opportunities Capex breakdown Commentary H1 23 US$m, FY 23 FY 22 H1 23 unless otherwise stated Guidance • H1 23 YTD capex of $93m, including $18m non- discretionary capex Acquisitions 557 9 • Tr
Slide 18: Q2 2023: Reduction in net leverage quarter-on-quarter
HIGHLIGHTS FINANCIAL RESULTS Q2 2023: Reduction in net leverage quarter-on-quarter Debt KPIs Commentary ($m) Q2 22 Q1 23 Q2 23 • Net leverage decreased by -0.3x QoQ to 4.8x Cash & cash equivalents 389 83 128 • Anticipate net leverage to be in or around the high- Bond (Dec-25) 975 975 975 end of targ
Slide 19: FY 2023: Guidance tightened upwards
HIGHLIGHTS FINANCIAL RESULTS FY 2023: Guidance tightened upwards FY 22 H1 23 FY 23 YoY Actual Actual Updated guidance FY 23 vs FY 22(3) Organic +1,900 - 2,100 tenancy +1,601 +1,391 of which 40% sites +8% - 9% of which 47% sites of which 23% sites additions (Prior: +1,600 - 2,100) Adj. EBITDA $283m $
Slide 20: Key takeaways
HIGHLIGHTS FINANCIAL RESULTS Key takeaways Executing on 2023 goals – acquisition integration, accelerating organic Adj. EBITDA growth and reducing net leverage Robust business model through high hard-currency earnings, contractual protections and attractive customer and market dynamics FY 23 g
Slide 21: Thank you
Jërëjëf Zikomo Thank you Matondo Matondi Asante Shukranًشكرا Merci Misaotra Medaase Siyabonga Helios Towers H1 2023 Results 21
Slide 22: Investor relations
Investor relations IR Contact Chris Baker-Sams Head of Strategic Finance and Investor Relations investorrelations@heliostowers.com Upcoming IR events Date Event 3-Aug JP Morgan Telecoms Towers Call Series fireside chat 19-Sep BofA European Telecoms Field Trip fireside chat 21-Sep JP Morgan Emerging
Slide 23: Appendix
Appendix Helios Towers H1 2023 Results 23
Slide 24: Q2 2023 sites and tenancies
Q2 2023 sites and tenancies Sites Tenancies Tenancy ratio Q2 23 Q2 22 YoY Q1 23 QoQ Q2 23 Q2 22 YoY Q1 23 QoQ Q2 23 Q2 22 YoY Q1 23 QoQ Tanzania 4,193 4,133 +60 4,195 (2) 9,535 9,212 +323 9,642 (107) 2.3x 2.2x +0.1x 2.3x 0.0x Senegal 1,386 1,278 +108 1,361 +25 1,483 1,348 +135 1,453 +30 1.1x 1.1x 0.
Slide 25: Our markets are some of the fastest growing in the world
Our markets are some of the fastest growing in the world Forecast 2023 real GDP growth(1) in HT markets Forecast 2023 inflation trend(1) in HT markets 45% 8% 25% 6% 5% (2) 4% 4% 4% 3% 10% (2) 9% 2% 7% 2% 2% 6% 5% 5% 5% 5% 1% 3% 2% 0% Senegal Group DRC G7 Congo B Madagascar South Africa Ghana Tanzani
Slide 26: Market overview: Macro and industry snapshot
Market overview: Macro and industry snapshot Mobile PoS Growth CAGR(3) Towers held by Credit ratings # MNOs(1) 4G/ 5G penetration Credit ratings(5) Penetration(2) (2021 – 2026) MNOs(4) momentum(6) Tanzania 4+ 48% 15% 8% 0.6k B2(Pos)/NR/B+(St) Senegal 3 44% 24% 7% 2.7k Ba3(St)/B+(St)/NR Malawi 2 41%
Slide 27: Adj. EBITDA protected through power price volatility
Adj. EBITDA protected through power price volatility Without power escalation protections With Helios Towers power escalation protections Illustrative example Illustrative example HT Q2 2023 US$m Before Power After US$m Before Power After US$m Q2 23 Power Q2 23 (unless otherwise power increase power
Slide 28: Leading ESG credentials
Leading ESG credentials Second ‘AAA’ ESG rating from MSCI, Jul 23 FTSE4Good Index inclusion, Jun 23 Scored B, Dec 22 Platinum rating, Nov 22 (the highest possible score from MSCI) (for a second consecutive year) (improvement from 2021 rating of B-) (rated top 1% from telecoms industry) ESG Risk Rati
Slide 29: Income Statement
Income Statement 6 months ended 30 June US$m 2023 2022 Revenue 350.2 265.4 Cost of sales (218.5) (173.6) Gross profit 131.7 91.8 Administrative expenses (62.9) (52.6) Profit/ (loss) on disposal of property, plant and equipment 0.5 0.6 Operating profit 69.3 39.8 Interest receivable 0.7 0.4 Other gain
Slide 30: Balance Sheet
Balance Sheet US$m 30 June 2023 31 December 2022 Non-current assets Intangible assets 573.5 583.5 Property, plant and equipment 931.4 931.4 Right-of-use assets 201.5 200.0 Derivative financial assets 3.7 2.8 1,710.1 1,717.7 Current assets Inventories 10.6 14.6 Trade and other receivables 329.8 246.8
Slide 31: Management Cash Flow
Management Cash Flow 6 months ended 30 June US$m 2023 2022 Adjusted EBITDA 173.8 136.1 Less: Maintenance and corporate capital additions (18.4) (9.3) Payments of lease liabilities1 (24.7) (20.0) Tax paid (6.2) (6.4) Portfolio free cash flow 124.5 100.4 Cash conversion %2 72% 74% Net payment of inter
Slide 32: Reconciliation of Adjusted EBITDA to loss before tax
Reconciliation of Adjusted EBITDA to loss before tax 6 months ended 30 June US$m 2023 2022 Adjusted EBITDA 173.8 136.1 Adjustments applied to give Adjusted EBITDA: Adjusting items: Deal costs1 (2.2) (6.9) Share-based payments and long-term incentive plans2 (1.0) (1.2) Other restructuring (0.8) - Gai
Slide 33: ROIC breakdown
ROIC breakdown US$m 2020 2021 2022 H1 23 Property, plant and equipment 594.7 708.2 931.4 931.4 Accumulated depreciation 713.0 833.3 934.0 997.9 Less: Accumulated maintenance and corporate capital expenditure (180.6) (202.7) (224.8) (243.2) Gross property, plant and equipment (excl. maint & corp capi
Slide 34: Disclaimer
Disclaimer This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in Helios Towers plc (the "Company") or any other member of the Helios Towers group