Helios Towers Plc · LSE:HTWS
Helios Towers — Shareholder Meeting (April 2020)
31 slides from Helios Towers's shareholder meeting presentation, Apr 9, 2020
Slide 1: Annual General Meeting
Annual General Meeting 9 April 2020
Slide 2: Helios Towers team today
Helios Towers team today Samuel Jonah, KBE, OSG Kash Pandya Tom Greenwood Magnus Mandersson Chair Chief Executive Officer Chief Financial Officer Senior Independent Director Alison Baker Richard Byrne David Wassong Temitope Lawani Independent Non-Executive Independent Non-Executive Non-Executive Non
Slide 3: Agenda
Agenda 1 Highlights 2 Financial Results 3 Q&A Helios Towers plc 3
Slide 4: Highlights
\D, ND, VD, » DALY SQ DALY DALY SA LAY BD AALY DALI LAL DALI LILY BD DALY DALY DALY DALY SA, MALI LAL LAL DALY LALL VA AVAN DB DAL LALLY SA DALY DB AAD DB AAD A_ AAL XK YX DALY LAL LAQLI LAL SA LAL xX YD DALY A LALY LAL ALY ye. LALLY DALY X K LAL LLLY/ raver NX one x LAL OY MG LAL & SK VA OL Oy Y A
Slide 5: FY 2019 highlights
FY 2019 highlights STRONG REVENUE +9% revenue growth from $356m in FY 18 to $388m in FY 19 GROWTH CONTINUED EBITDA +16% EBITDA growth from $178m in FY 18 to $205m in FY 19, with FINANCIAL EXPANSION… margin expansion of +3ppt to 53% …DRIVING CASH FLOW Portfolio free cash flow of US$169m(1) for FY 19,
Slide 6: 20 consecutive quarters of LQA Adj. EBITDA growth
20 consecutive quarters of LQA Adj. EBITDA(1) growth LQA Adj. EBITDA(2) ($m) Adj. EBITDA(1) margin (%) 250 100% LQA Adj. EBITDA(1) CAGR Q1 2015 – Q4 2019 41% 90% 200 80% Margin has more than doubled 70% >2x through top-line growth and implementation of business 150 excellence strategy 54% 54% 60% 51
Slide 7: South Africa entry in 2019
South Africa entry in 2019 Attractive indicators and solid execution since entry Attractive macro indicators Growth from infrastructure platform Population of 58 million forecast to increase by 4 1 million over the next 6 years(1) Helios Towers South Africa (“HTSA”) created through 1 Partnership wit
Slide 8: Successful float of HT plc with premium listing on the London Stock Exchange
Successful float of HT plc with premium listing on the London Stock Exchange • On 18 October 2019 Helios Towers was admitted to the premium segment of the Official List and trading on the Main Market of the London Stock Exchange • Entry into FTSE 250 in December 2019 • IPO raised $360m: • $125m prim
Slide 9: The substantial tower opportunity in Africa
The substantial tower opportunity in Africa Number of towers Significant number of potential countries for expansion growing rapidly Number of Shareable towers owned by towers in Africa 228k MNOs in Africa (2019): 150k Africa 165k 2014 2019 0.8k Mobile operators are selling Non-HT Markets their towe
Slide 10: Attractive Growth Opportunities for Future Development
Attractive Growth Opportunities for Future Development 1 ORGANIC • Positive macro drivers and low telecom penetration to drive requirement for TENANCY GROWTH IN +19,000 new PoS in the HT markets(1) EXISTING MARKETS 2 • Percentage of towers owned by independent towercos in Africa is growing INORGANIC
Slide 11: Leading Values, Ethics and SHEQ
Leading Values, Ethics and SHEQ(1) Values Ethics Group program for training and reinforcing our value; Training and code of conduct extends to suppliers Global whistleblower hotline in place Anti-Bribery Management System certified ISO 37001 compliant relating to business functions including m
Slide 12: Financial Results
\D, ND, VD, » DALY SQ DALY DALY SA LAY BD AALY DALI LAL DALI LILY BD DALY DALY DALY DALY SA, MALI LAL LAL DALY LALL VA AVAN DB DAL LALLY SA DALY DB AAD DB AAD A_ AAL XK YX DALY LAL LAQLI LAL SA LAL xX YD DALY A LALY LAL ALY ye. LALLY DALY X K LAL LLLY/ raver NX one x LAL OY MG LAL & SK VA OL Oy Y A
Slide 13: Track record of strong Adj. EBITDA growth
Track record of strong Adj. EBITDA(1) growth Adj. EBITDA(1) ($m) Adj. EBITDA(1) margin (%) +95% +16% 250.0 80% 205 70% 200.0 178 60% 146 150.0 50% 53% 105 50% 40% 100.0 42% 37% 30% 50.0 20% 0.0 10% 2016 2017 2018 2019 (1) Adjusted EBITDA is defined as loss for the period, adjusted for tax expenses,
Slide 14: FY 2019: Continued strong financial and operational performance
FY 2019: Continued strong financial and operational performance QoQ YoY Q3 19 Q4 19 % change FY 18 FY 19 % change In US$m, unless QoQ YoY otherwise stated Revenue 97 100 3% 356 388 9% Adj. EBITDA(1) 52 54 2% 178 205 16% LQA Adj. EBITDA(2) 210 215 2% 186 215 16% Adj. EBITDA margin (%) 54% 54% 0ppt 50
Slide 15: Q4 2019: Strong revenue and Adj. EBITDA growth
Q4 2019: Strong revenue and Adj. EBITDA growth Revenue Adj. EBITDA Adj. EBITDA margin +11% +16% +2 ppt +3% +2% 0 ppt 97 100 52 54 52% 54% 54% 90 47 Q4 18 Q3 19 Q4 19 Q4 18 Q3 19 Q4 19 Q4 18 Q3 19 Q4 19 • Q4 19 revenue increased 11% YoY and 3% QoQ to $100m. YoY revenue growth in all OpCos with partic
Slide 16: Consistent and strong currency protection and blue-chip customer base
Consistent and strong currency protection and blue-chip customer base FY 2019 revenue breakdown by customer FY 2019 revenue breakdown by FX Other LCY (CPI) 21% 13% LCY (Power) USD 19% 54% Africa’s Big 5 MNOs(1) 87% XAF/EUR 6% FY 2019 revenue breakdown by operating company Commentary Ghana South Afri
Slide 17: Strong tenancy growth and tenancy ratio expansion
Strong tenancy growth and tenancy ratio expansion Evolution of sites portfolio Evolution of tenants Evolution of tenancy ratio +3% +8% +0.08x +1% +3% +0.03x 6,903 6,974 14,226 14,591 6,745 208 118 13,549 385 110 384 557 193 568 380 529 1,888 891 950 961 1,680 1,788 3,492 3,717 3,828 1,773 1,821 1,85
Slide 18: FY 2019 costs and tower cash flow analysis
FY 2019 costs and tower cash flow analysis Quarterly operating cost breakdown(1) Monthly cash flow per tower ($) (2) FY 19 Site opex: $133m 3,214 +11% 38 39 39 36 35 34 34 34 32 33 31 32 2,906 46% 45% 45% 40% 40% 38% 35% 35% 36% 35% 33% 33% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 17 17 17 17 18 18 18 18
Slide 19: Diversified Adjusted EBITDA with 65% in hard currency
Diversified Adjusted EBITDA with 65% in hard- currency FY 2019 Adj. EBITDA breakdown by FX Commentary 65% Adj. EBITDA in hard currencies in FY 19, in-line with US CPI and LCY power FY 18 35% escalators Local CPI Provides strong natural hedge for the business and power USD Tanzania and DRC repr
Slide 20: Capital expenditure – tightly controlled and carefully applied for growth
Capital expenditure – tightly controlled and carefully applied for growth Commentary Capex breakdown ($m) Small in-market FY 19 capex of $114m, decreasing -4% YoY: acquisitions, Guidance currently being discussed Discretionary capex of $102m Maintenance and corporate capex of $12m (FY 18: $16m
Slide 21: Summary of financial debt
Summary of financial debt Debt KPIs Gross and net leverage ($m) FY 18 Q4 18 FY 19 Q4 19 -0.4x / -0.8x Cash & cash equivalents 89 89 221 221 4.2x 4.0x 3.9x Less: Restricted cash (2) - - 38 38 3.7x 3.8x 3.5x Cash excl. restricted cash 89 89 183 183 3.1x 2.9x Bond 600 600 600 600 Term loan 25 25 75 75
Slide 22: Strong growth in portfolio free cash flow conversion
Strong growth in portfolio free cash flow conversion; Working capital outflow driven by large customer payment timings 12 months ended Strong portfolio free cash flow conversion ($m) 2017 2018 2019 Adj. EBITDA 146 178 205 Non-discretionary capex(1), leases(2) & taxes (49) (45) (36) Portfolio free ca
Slide 23: COVID-19 considerations – resilient business model
COVID-19 considerations – resilient business model Commentary Impact Assessment Administrative staff ready and equipped to work from HT home if required Workforce & Minimal disruption expected Operations in discrete locations and outdoor Operations environments Existing $2.9bn contracted revenues wi
Slide 24: Financial outlook for FY 20 is unchanged
Financial outlook for FY 20 is unchanged Forecast at Expectations Variance IPO for 2020 • Targeting 1-1.5k over medium term, with rate of tenancies increasing • Targeting 1-1.5k Tenancies • Of which, 50% sites, gradually • 40% sites In-line reducing to 25% over medium term Lease rates • USD inflat
Slide 25: Investment thesis reaffirmed
Investment thesis reaffirmed STRATEGICALLY • Portfolio of 6,974 sites and 14,591 tenancies in 5 markets POSITIONED IN • Market leader in 3 out of 5 markets in which we operate STRUCTURALLY • Track record of execution with 20 consecutive quarters of Adjusted EBITDA ATTRACTIVE MARKETS growth STRONG OR
Slide 26: Q&A
Q&A KY peur MA ‘ % % % LN BAY AY & x % x
Slide 27: Disclaimer
Disclaimer This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire or dispose of securities in Helios Towers plc (the "Company") or any other member of the Helios Towers group
Slide 28: Appendix
\D, ND, VD, » DALY SQ DALY DALY SA LAY BD AALY LLY LAL DALI LILY BD DALY DALY DALY LIVY NA MALI LAL LAL DALY LALL VA AVAN DB DAL LALLY SA DALY DB AAD DB AAD A_ AAL XK YX DALY LAL LAQLI LAL SA LAL xX YD DALY A LALY LAL ALY ye. LALLY DALY X K LAL LLLY/ raver NX one x LAL OY MG LAL & SK VA OL OH Y A OK
Slide 29: Summary Income Statement
Summary Income Statement ($m) FY 19 FY 18 Revenue 387.8 356.0 Cost of sales (261.9) (255.8) Gross Profit 125.9 100.2 Admin expenses (119.4) (91.1) Loss on disposal of PPE (11.0) (5.8) Operating (loss)/profit (4.5) 3.3 Interest receivable 0.7 1.0 Gain/(loss) on derivative financial instrument 33.9 (1
Slide 30: Summary Balance Sheet
Summary Balance Sheet ($m) FY 2019 FY 2018 Non–current assets Intangible assets 28.4 12.4 Property, plant and equipment 631.9 676.6 Right-of-use assets 108.2 103.8 Investments in subsidiaries 0.0 0.1 Derivatives financial assets 41.0 7.1 809.5 800.0 Current assets Inventories 9.3 10.3 Trade and othe
Slide 31: Summary Cash Flow Statement
Summary Cash Flow Statement ($m) FY 19 FY 18 Adj. EBITDA 205.2 177.6 Less: Tax paid (1) (3.3) (2.9) Less: Payments of lease liabilities (2) (20.9) (25.5) Less: Maintenance and corporate capex (3) (12.1) (16.4) Portfolio free cash flow 168.9 132.8 Cash conversion % (4) 82% 75% Less: Net payment of in