Helios Towers Plc · LSE:HTWS
Helios Towers — Q1 2024 Earnings Presentation
28 slides from Helios Towers's earnings presentation, May 16, 2024
Slide 1: Q1 2024 Results
Q1 2024 Results 16 May 2024
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 2 Helios Towers Q1 2024 Results
Slide 3: Agenda
Agenda 1. Highlights 2. Financial results 3. Q&A Dar es Salaam, Tanzania
Slide 4: Highlights
Highlights Odzala National Park, Congo Brazzaville
Slide 5: Highlights
HIGHLIGHTS 1 2 3 4 Q1 24: Consistent Q1 24: Double-digit Q1 24: Credit rating FY 24: Guidance and strong tenancy growth and ROIC upgrades reiterated additions expansion • +761 YTD tenancy additions • +14% YoY revenue growth • Rating upgrades by Moody’s • 1,600 - 2,100 tenancy additions (+2,566 YoY),
Slide 6: Q1 2024: Solid Progress Towards FY Guidance
Q1 2024: SOLID PROGRESS TOWARDS FY GUIDANCE Organic tenancy additions (#) Adj. EBITDA (US$m) PFCF and ROIC (US$m / %) Tenancy ratio Adj. EBITDA margin 1.81x 1.91x 1.95x 50% 51% 53% 2,433 409 405 - 420 275 – 290 280 268 1,600 – 2,100 370 13% 283 201 1,601 12% 10% 761 FY 22 FY 23 Q1 24 FY 24 FY 22 FY
Slide 7: Tenancy Ratio Expansion on Enlarged Platform Driving ROIC Expansion
TENANCY RATIO EXPANSION ON ENLARGED PLATFORM DRIVING ROIC EXPANSION Capital allocation priorities: 1 Optimised organic investments Tenancy 2.2x 2 Deleveraging 2.13x ratio 3 Investor 1.96x 1.91x 1.95x distributions ROIC 14.5% 1.81x 4 Opportunistic M&A 12.6% 11.8% 12.0% 10.3% New market Senegal Malawi
Slide 8: Group ROIC Reflects Mix of Established vs. New Markets
GROUP ROIC REFLECTS MIX OF ESTABLISHED VS. NEW MARKETS Established markets yielding 18% 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, Congo B, Ghana, South Africa) (Oma
Slide 9: Sustainable Business Strategy Update
SUSTAINABLE BUSINESS STRATEGY UPDATE Integrated Annual Report published in Mar-24 • Enhanced disclosure by expanding scope of independent assurance to Scope 3(1) carbon emissions, gender diversity and population coverage • Set up a dedicated Sustainability Committee in FY 23 to drive progress and in
Slide 10: Financial Results
Financial results Ituri, DRC
Slide 11: Operational & Financial Highlights
OPERATIONAL & FINANCIAL HIGHLIGHTS YoY QoQ In US$m, unless otherwise stated Q1 2024 Q1 2023 Change Q1 2024 Q4 2023 Change Sites (#) 14,166 13,684 +4% 14,166 14,097 +0% Tenancies (#) 27,686 25,120 +10% 27,686 26,925 +3% Tenancy ratio (x) 1.95x 1.84x +0.11x 1.95x 1.91x +0.04x Revenue 195 171 +14% 195
Slide 12: Consistent and Strong Tenancy Growth Supporting Tenancy Ratio Expansion to 1.95x
Q1 2024: CONSISTENT AND STRONG TENANCY GROWTH SUPPORTING TENANCY RATIO EXPANSION TO 1.95X Sites Tenancies Tenancy ratio +4% +10% +0.11x 14,166 27,686 1.95x 13,684 25,120 1.84x 3,657 2,519 2,531 3,072 9,685 11,083 4,843 5,204 6,322 6,431 12,363 12,946 Q1 23 Q1 24 Q1 23 Q1 24 Q1 23 Q1 24 • Site additi
Slide 13: Q1 2024: Adjusted EBITDA Growth +21% Year-on-Year
Q1 2024: ADJUSTED EBITDA GROWTH +21% YEAR-ON-YEAR Revenue (US$m) Adj. EBITDA (US$m) Adj. EBITDA margin (%) +14% +21% +3ppt 195 102 171 17 85 12 13 9 98 50 81 37 53% 50% 77 79 47 49 -8 -9 Q1 23 Q1 24 Q1 23 Q1 24 Q1 23 Q1 24 • Organic revenue growth driven by tenancy • Adj. EBITDA growth driven by ten
Slide 14: Adj. EBITDA Growth Highly Correlated to Tenancy Additions and Resilient to FX, CPI
ADJ. EBITDA GROWTH IS HIGHLY CORRELATED TO TENANCY ADDITIONS AND RESILIENT TO FX, CPI AND POWER PRICE MOVEMENTS Q1 24 YoY revenue walkthrough(1,2) Q1 24 YoY Adj. EBITDA walkthrough(1) (US$m) (US$m) +14% +21% 7 (8) 0 4 (3) 22 3 17 195 102 171 85 +13% +2% +4% (5%) +20% 0% +4% (3%) Q1 23 Organic tenanc
Slide 15: Capex Tightly Controlled and Focused on ROIC-Enhancing Opportunities
CAPEX IS TIGHTLY CONTROLLED AND FOCUSED ON OPPORTUNITIES THAT ENHANCE ROIC FY 24 Q1 24 Capex breakdown ($m) FY 23 Q1 24 Guidance • Q1 24 capex of $45m, in line with expectations Acquisitions 20 5 Growth 113 18 FY 24 guidance • Capex guidance of $150m - $190m is Upgrade 35 8 unchanged, of which c.$45
Slide 16: Continued Focus on Deleveraging Has Supported Credit Rating Upgrades
CONTINUED FOCUS ON DELEVERAGING HAS SUPPORTED CREDIT RATING UPGRADES Debt KPIs Q1 23 Q4 23 Q1 24 Commentary Cash & cash equivalents 83 107 89 • Net leverage decreased by -0.7x YoY to Bond (Dec-25) 975 650 650 4.4x; target below 4.0x in FY 24 Convertible bond(1) (Mar-27) 247 247 247 • c.$470m in avai
Slide 17: FY 2024 Guidance Reaffirmed
FY 2024 GUIDANCE REAFFIRMED FY 23 Q1 24 FY 24 YoY Actual Actual Guidance(1) Growth(3) Organic tenancy additions +2,433 +761 +1,600 - 2,100 +6 - 8% Adj. EBITDA $370m $102m $405m - $420m +10 - 14% PFCF $268m $70m $275m - $290m +3 - 8% $203m $45m $150m - $190m Capex of which $35m non- of which $15m non
Slide 18: Key Takeaways
KEY TAKEAWAYS ✓ ✓ ✓ ✓ ✓ ✓ Consistent and strong +21% Adj. EBITDA growth FY 24 guidance reiterated: tenancy additions and +3ppt ROIC expansion Focused on organic (+761 YTD/ +2,566 YoY) YoY growth, deleveraging and free cash flow inflection(1) 18 Helios Towers Q1 2024 Results (1) Excluding the closing
Slide 19: Q&A Thank you
Q&A Thank you Jërëjëf Medaase Zikomo Merci Matondi Asante Misaotra Shukranًشكرا Siyabonga Matondo Dakar, Senegal
Slide 20: Investor Relations
INVESTOR RELATIONS Upcoming IR events Event IR Contact 29 to 31-May BofA Emerging Markets Corporate Conference Chris Baker-Sams Head of Strategic Finance and 11-June BofA C-Suite TMT Conference Investor Relations investorrelations@heliostowers.com 25-June Morgan Stanley Global Tower Day 27-June Barc
Slide 21: Appendix
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Slide 22: Market Overview: Macro and Industry Snapshot
MARKET OVERVIEW: MACRO AND INDUSTRY SNAPSHOT Mobile 4G/ 5G PoS Growth CAGR(3) Towers held by Credit ratings # MNOs(1) Credit ratings(5) Penetration(2) penetration(2) (2023 – 2028) MNOs(4) momentum(6) Tanzania 4 48% 20% 6% 0.7k B1(St)/NR/B+(St) Senegal 3 46% 36% 6% 2.6k Ba3(St)/B+(St)/NR Malawi 2 41%
Slide 23: Q1 2024 Sites & Tenancies and Population Coverage
Q1 2024 SITES & TENANCIES AND POPULATION COVERAGE Population Sites Tenancies Tenancy ratio coverage FY Q1 Q4 Q1 Q1 Q4 Q1 Q1 Q4 Q1 YoY QoQ YoY QoQ YoY QoQ 23 23 23 24 23 23 24 23 23 24 Tanzania 38m 4,195 4,156 4180 (15) +24 9,642 9,680 9,984 +342 +304 2.3x 2.3x 2.4x +0.1x +0.1x Senegal 12m 1,361 1,44
Slide 24: Diversified Business Underpinned by Long-Term Contracts with Blue-Chip MNOs
DIVERSIFIED BUSINESS UNDERPINNED BY LONG-TERM CONTRACTS WITH BLUE-CHIP MNOS Diverse, quality customer base Robust hard-currency revenues Geographically diverse sites Q1 24 revenue breakdown by customer Q1 24 revenue breakdown by FX Q1 24 site breakdown by segment 1% Largest customers 17% 18% Airtel
Slide 25: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Capital allocation policy focused on growing portfolio free cash flow while consistently delivering ROIC above our cost of capital Current priorities: Optimised organic Capital efficient investments accretive to ROIC – colocations, 1 investments operational efficiencies
Slide 26: ROIC Breakdown
ROIC BREAKDOWN US$m 2020 2021 2022 2023 Q1 24 Property, plant and equipment 594.7 708.2 907.9 918.3 929.4 Accumulated depreciation 713.0 833.3 934.0 1,127.5 1,134.1 Accumulated maintenance and corporate capital expenditure (180.6) (202.7) (224.8) (260.3) (274.8) Intangible assets 23.2 231.4 575.2 54
Slide 27: Leading ESG Credentials
LEADING ESG CREDENTIALS Third ‘AAA’ ESG rating from MSCI, Mar 24 FTSE4Good Index inclusion, Jun 23 Scored B, Feb 24 Gold rating, Feb 24 (the highest possible score from MSCI) (for a second consecutive year) (2023 rating reaffirmed) (rated top 5% of telecoms industry) ESG Risk Rating of 16.8 (Low Ris
Slide 28: 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