Infrastrutture Wireless Italiane S.p.a. · MIL:INW
Infrastrutture Wireless Italiane — FY2017 Earnings Presentation
46 slides from Infrastrutture Wireless Italiane's earnings presentation, April 2018
Slide 1: Post FY'17 Financial Results & Plan Update
Post FY’17 Financial Results & Plan Update Investors Presentation April, 2018
Slide 2: Safe Harbor
Safe Harbor This presentation contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this presentation and include statements regarding the intent, belief or current e
Slide 3: A remarkable +17% growth in 2017
A remarkable +17% growth in 2017 Continuing our path of growth and efficiency Tenancy Ratio ► New Tenants drive up revenues: FY’17 revenues at + 6.9% YoY ► Cost reduction continues: Lease reduction of - 4.6% YoY 1.82x FY’17 Investment Plan set to fuel future growth ► New sites: 300 Up & Running Out
Slide 4: Industrial Results
FY’17 Financial Results & Plan Update Industrial Results Investor Presentation Michele Vitale 4
Slide 5: Revenue growth delivered
Revenue growth delivered FY’17 Revenues 88.1 10.5 356.6 258.0 Euro Mln ~ 300 New Sites up & running ~ 350 Sites not dismantled & retained Deriving from ~ 9.4k tenants and ~ 1000 Small Cells up&running some one-offs TIM OLO & Others New Sites e New Services Total 1 2 0 3 (MSA on existing sites) (on e
Slide 6: Additional efficiency secured
Additional efficiency secured FY’17 Operating Expenses 21.9 8.0 164.6 134.7 Euro Mln 1 2 Ground Lease Other Opex Personnel Total OPEX New Sites Head Count 154 Includes ~ € 2,4 mln of Due to 12 people 179 151 additional costs hired for new business 175 due to new sites built up 170 141 165 135 -1% +2
Slide 7: New tenants and Lease reduction key drivers for growth
New tenants and Lease reduction key drivers for growth New Tenants Cost Saving Tenancy Ratio Decommissioning # tenant per site 1 # sites dismantled retained and marketable paid by TIM 1.82 x 850 350 200 1.72x 1.62x 14 mln € to receive 1.55x more tenants additional EBITDA run rate # New OLO tenants L
Slide 8: New Investments to generate solid additional revenues stream
New Investments to generate solid additional revenues stream New Sites Small Cells Backhauling # Sites # Remote Units # Backhauling Connections Up & ~ 2,500 Running Under Construction Requested – Under ~ 500 Negotiation ~ 400 300 1,013 140 > 7 mln € > 3.5 mln € > 0.6 mln € run rate revenues run rate
Slide 9: Financials
FY’17 Financial Results & Plan Update Financials Investor Presentation Michele Vitale 9
Slide 10: Sound and positive economic trends in all metrics
Sound and positive economic trends in all metrics FY'17 FY'16 YoY % YoY Abs Main KPIs Euro Mln Revenues 356.6 333.5 +6.9% +23.1 TIM (MSA) ¹ 258.0 253.0 +2.0% +5.0 REVENUES OLOs & others ² 88.1 78.2 +12.7% +9.9 New Sites & Small Cells ³ 10.5 2.3 +356.5% +8.2 +6.9% FY’17 YoY OPEX (164.6) (169.9) (3.1%
Slide 11: Main Achievements – Full Year View
Main Achievements – Full Year View EBITDA EBITDA Margin 17% 42% 53.8% EBITDA Margin 192.0 163.6 144.2 135.0 Euro Mln 49.1% Tenancy Ratio 45.2% 1.82x 42.9% 1.72x 1.55x 1.62x 1 2 1 IPO FY15 FY16 FY17 IPO FY15 2 FY16 FY17 CAPEX + 57.4% 55 26 Acceleration in 4Q in line 35 with expectation Mln Euro 15 Ml
Slide 12: Profit & Loss at December 31st, 2017
Profit & Loss at December 31st, 2017 Interests Taxes ► Cash Financial Charges: 1.5k € mainly interests on LTD at 1.33% ► Tax rate down 3pp YoY - all-in cost driven by 3pp IRES ► Non-cash interest: 2.2k€ reduction mainly on ARO Fund 356.6 164.6 Euro Mln 192.0 12.5 0.3 179.2 3.7 48.8 126.7 Revenues OP
Slide 13: Cash Flow at December 31st, 2017
Cash Flow at December 31st, 2017 Investments Var. NWC & Others Cash Taxes - 50.7 mln € Expansion Capex Mainly impacted by: ~ 5 mln € 2015 taxes (final tranche) & (Land acquisition, New Sites Enfranchisement paid in 2Q17 Small Cells & Others) • Seasonal Swing on commercial working capital • Cash Adva
Slide 14: Balance Sheet at December 31st, 2017
Balance Sheet at December 31st, 2017 1412 13 97 9 1568 46 720 1523 Euro Mln 803 222 27 Tangible Other Fixed Goodwill NWC ARO Fund Other BS Total Net NFP Equity & Distributable Total Equity Assets Assets Items Assets Legal Reserves Reserves Net Debt/EBITDA 0.24x Intact financial flexibility Distribut
Slide 15: Plan Update
FY’17 Financial Results & Plan Update Plan Update Investor Presentation Michele Vitale 15
Slide 16: Inwit at a Glance
Inwit at a Glance Assets Revenues REVENUES FY’17 • Civil infrastructure • Master Service Tower base Agreement with TIM 357 mln € Coaxial Cable Tower / Mast • Contracts with MNOs Others Room – Shelter and other radio • Power units players (Fixed Power systems Wireless Access, Back-up systems Public S
Slide 17: Inwit Equity Story reinforced
Inwit Equity Story reinforced 1 LOW LONG TERM Existing contracts account for 18x 2017 revenues 1 High Visibility CONTRACTS on Revenues RISK Full Protection against Inflation MNOs demand 2 MORE OLO 0,1x per year CONTRACTS Fixed Wireless Access Providers tenancy growth ROBUST (New Sites, Small Cells,
Slide 18: 2018 Target confirmed
2018 Target confirmed 2015-18 LOW TEENS EBITDA CAGR Room for additional growth ~200 Actions underlying target confirmation Tenancy 1,9 x Ratio Euro MLN 0,5 k New Sites 144 0,6 k Backhauling Small Cells 4k & DAS Action Concluded 1,4 k Dismantling in 2017 1,0 k Land Acquisition 1 FY14 FY15 FY16 FY17 F
Slide 19: 2020 Plan Targets
2020 Plan Targets 2017-20 MID SINGLE DIGIT Mln € Revenues CAGR 357 334 EBITDA trend Revenues will be strongly impacted by IFRS16 adoption 192 164 2017-20 LOW TEENS EBITDA Rec FCF CAGR1 2,1x tenancy ratio 127 101 €65Mln Rec FCF new serv revenues FY16 FY17 FY18 FY19 FY20 1. Recurring Free Cash Flow =
Slide 20: Foundation: Infrastructure, Contracts and Customers
1 Foundation: Infrastructure, Contracts and Customers Infrastructures Customers Inflation or Interest Rate Increase • INWIT's assets include the passive • High credit standing of all tenants infrastructure component of a cell • Our customer base is not only composed of site mobile operators: Public
Slide 21: Inwit Tower Portfolio & tenancy increase
2 Inwit Tower Portfolio & tenancy increase “A” SITES “B” SITES “A” Sites located in low-density population areas, “B” Sites located in high-density population areas, predominantly with less than 50 k inhabitants predominantly with more than 50 k inhabitants 7.1 k TOWERS 2014 * 4.1 k Sites Sites 1.74
Slide 22: New tenants key drivers for growth
2 New tenants key drivers for growth 2015-17 Results 2018-20 Plan # New OLO tenants # new tenant hosted 9.400 8.400 7.100 FY’20 1 FY’18 2.1x Tenancy Ratio # tenant per site 1.9x 1.82x 1.72x 1.62x 1.55x Avg Revenues per Site More tenants from Existing Customers k€ - annualized • Leverage on the estab
Slide 23: Lease reduction key drivers for growth
2 Lease reduction key drivers for growth 2015-17 Results 2018-20 Plan Decommissioning # sites dismantled retained and marketable paid by TIM 850 350 200 to receive more tenants Lease Reduction renegotiated addressable # sites 3.5 k ~3k acquired ~ 0,6 k ~1 k ~ 1,5 k FY’17 FY’18 FY’20 Avg Lease Cost p
Slide 24: Investments to generate solid additional revenues stream
3 Investments to generate solid additional revenues stream New Sites Small Cells Backhauling # Sites # Remote Units # Backhauling Connections ~ 2,500 Up & Running Under Construction Requested – Under ~ 500 ~ 400 Negotiation 2017 Results 1,013 300 140 # Sites # Remote Units # Backhauling Connections
Slide 25: Investments driving up top line increase
3 Investments driving up top line increase 2017 Results 2018-20 Plan Unitary CAPEX ‘17 KPI Economic ’18 KPI ‘20 KPI Economic Impact Impact New €50-75k ~ 0,3k ~7M > 0,5k > 0,7k sites per new site New sites rev New sites New sites Small €10-20k ~ 1k ~ 3.5 M > 4k > 10k cells per remote unit rev Remote
Slide 26: Consolidation can Turn Efficient the Italian Tower Market
4 Consolidation can Turn Efficient the Italian Tower Market Italian Tower Market Synergies to be extracted Market Tenancy Ratio: @2.5x Towers Needed: ~30k Potential Savings 200 mln € Market Tenancy Ratio: @4x Towers Needed: ~20k Synergies per tower Potential Savings 350 mln € Investor Presentation M
Slide 27: Back Up: 5G for Towercos
Back Up: 5G for Towercos Investor Presentation Michele Vitale 27
Slide 28: 5G requirements …
5G requirements … DATA CONSUMPTION NETWORK EVOLUTION 5G Network Capability Fast Exabytes per Month Massive Reliable New Technologies Data per user CAGR >40% - (9x in 6 years) Cell Capacity is fixed if same technology /spectrum Massive Beam- Full Millimeter Small MIMO forming Duplex Waves Cells NEW S
Slide 29: … Translate into many Opportunities
… Translate into many Opportunities 5G impacts for towercos More Revenues More Towers More Shared per Towers (small cells) Infrastructures More customers: Network Densification: Software Define Network: New 5G services will be offered by New network features require Mobile Operators may be likely MN
Slide 30: Small Cells – Needs & Market
Small Cells – Needs & Market Data Consumption … Today 2018 E Longer Term Italian Mobile Data Traffic Italian Market >> 200 k Remote Units Exabytes per Month Cisco VNI – Ericsson Mobility Report Few Thousands Few Hundreds > 4k Data per user CAGR >40% (9x in 6 years) Hundreds TOTAL TOTAL TOTAL Cell Ca
Slide 31: Small Cells – Architecture & Economics
Small Cells – Architecture & Economics Multi – Tenant DAS Mono–Tenant SMALL CELLS Same spectrum shared among thousands of Private spaces and outdoor coverage Public spaces Indoor or Indoor-like locations users Spectrum dedicated to few hundred users INDOOR DAS OUTDOOR DAS Shopping malls (INDOOR-LIKE
Slide 32: Focus on planned services: Tower Data Centers
Focus on planned services: Tower Data Centers Lower latency implies lower distance from user to content. Distributed Caching will improve the Customer Experience & reduce backhauling costs. DISTANCE USER – CONTENT: LONGER DISTANCE USER – CONTENT: SHORTER BACKHAULING BACKHAULING CORE CORE distanc
Slide 33: Back Up: Tower Market
Back Up: Tower Market Investor Presentation Michele Vitale 33
Slide 34: Tower Market: Worldwide
Tower Market: Worldwide Stand alone Mobile Operators or with sharing agreements JV amongst MNOs or Operator-led TowerCos Independent Tower Operators World Main Trend Sites (#) % of Independent Tower Operators and JV amongst MNOs or Operator-led TowerCos USA Europe ~4mln (TOP 5 Countries) 70% 32% ~60
Slide 35: US vs European TowerCo Business Model
US vs European TowerCo Business Model US EU Long-Term Contracts > 10 yrs Potential Revenues Tenancy Ratio > 2x Stable to grow further Amendments & Escalator > 3% Fuel for No amendments growth Link to Inflation 100% CPI-Linked 40% Growing Business Small Cells Just started YoY New Linked to Fiber Smal
Slide 36: Tower Market: Italy
Tower Market: Italy Others TowerCos (Number of Towers) Mobile Operators ~ 8k Towers ~ 10-12k Towers ~ 11k Towers ~ 10-12k Towers ~ 1k Towers ~ 1-2k ~40-50k (Number of Towers towers Antennas) ~ 19-21k PoPs ~ 19-21k PoPs ~ 27k 21k PoPs Other Radio Players ~1.4/1.5x 62-68k JV (now at 27k PoPs) First-
Slide 37: M&A Upside: In-Country Consolidation drivers
M&A Upside: “In-Country” Consolidation drivers Mob Mob Operator Operator 1 2 Mob Mob Operator 1 Operator 2 EBITDA UPSIDE Only 1 lease fee Only 1 O&M Cost Land Owner 1 Land Owner 2 Land Owner 1 Land Owner 2 EBITDA DOWNSIDE Reviewed Fee to MNO2 Increased Lease Fee Host Lease Host Lease Fee 1 F
Slide 38: Potential Evolution of EM Emissions Regulation
Potential Evolution of EM Emissions Regulation 1998 2016 2018 ICNIRP announced an update The revision of the guidelines Europe set ►Ranging ca. 40-60 V/m on their recommendation to and a public consultation recommended limits – 39V/m for 800 MHz be implemented in a few version of the guidelines is 1
Slide 39: Board of Directors
Board of Directors The Board of Directors is composed of 15 members and will hold office until the date of the ordinary shareholders’ meeting approving the financial statements as of and for the year ending December 31, 2017. Francesco Profumo (1) Chairman Oscar Cicchetti Chief Executive Officer Pao
Slide 40: Back Up: Databook
Back Up: Databook Investor Presentation Michele Vitale 40
Slide 41: Databook – Reported Profit and Loss
Databook – Reported Profit and Loss [Unaudited] [Audited] [Audited] [Audited] [Unaudited] [Audited] [Audited] [Unaudited] [Audited] [Unaudited] [Audited] FY14 3M15 6M15 9M15 FY15 3M16 6M16 9M16 FY16 3M17 6M17 9M17 FY17 1 (Apr- (Apr - (April- Annualized 2 (Jan- (Jan - (Jan-Sep) (Jan-Dec) (Jan-Mar) (J
Slide 42: Databook – Reported Profit and Loss – Quarterly view
Databook – Reported Profit and Loss – Quarterly view Average 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Currency: €m Quarter (Jan-Mar) (Apr- (Jul - (Oct.-Dec.) (Jan-Mar) (Apr- (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) Pro-forma 1 June) Sept.) June) Revenues 78.6 79
Slide 43: Databook – Cash Flow
Databook – Cash Flow [Audited] [Audited] [Audited] [Audited] [Audited] [Audited] [Unaudited] [Audited] [Unaudited] [Audited] As of As of As of As of Dec. As of As of As of As of As of As of As of As of March June Sept. Currency: €m 31st 2015 March June Sept. Dec. 31st March June Sept. Dec. 31st 31st
Slide 44: Databook – Balance Sheet
Databook – Balance Sheet [Audited] [Unaudited] [Audited] [Audited] [Audited] [Audited] [Audited] [Unaudited] [Audited] [Unaudited] [Audited] As of As of As of As of As of As of As of Sept 30th Dec. 31 As of As of As of As of As of April 1st June As of Dec. Currency: €m Mar. 31st Sept. Mar. 31st June
Slide 45: Databook – Operational KPIs
Databook – Operational KPIs PF2014 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 As of As of As of As of Dec. As of June As of Sept. As of Dec. As of June As of Dec. As of June As of Sept. As of Dec. Operational KPIs March 31 September March 31 31 2014 PF 30 2015 30 2015 31 2015 30 2016 31
Slide 46: More questions? Ask Investor Relations
More questions? Ask Investor Relations Michele Vitale Head of Investor Relations michele.vitale@inwit.it f: +39 06 44084 320 Investor Presentation Michele Vitale 46
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