Helios Towers PLC · LSE:HTWS
Helios Towers — FY2021 Earnings Presentation
34 slides from Helios Towers's earnings presentation, Mar 17, 2022
Slide 1: FY 2021 Results
FY 2021 Results 17 March 2022 Significant portfolio expansion: Investing for quality growth & returns
Slide 2: Helios Towers team today
Helios Towers team today Kash Pandya Tom Greenwood Manjit Dhillon Chief Executive Officer CEO-Designate Chief Financial Officer Helios Towers FY 2021 Results 2
Slide 3: Agenda
Agenda 1. FY 2021 Highlights 2. Business Update 3. Financial Results 4. Q&A Helios Towers FY 2021 Results 3
Slide 4: FY 2021 Highlights
FY 2021 Highlights Helios Towers FY 2021 Results 4
Slide 5: FY 2021 highlights
FY 2021 highlights Transformational year through portfolio expansion, strengthened balanced sheet and record operational performance 1 2 3 4 5 CONSISTENT AND TRANSFORMATIONAL ROBUST FINANCIAL CONTINUED COST OF OUTLOOK UPDATED FOR STRONG ORGANIC YEAR THROUGH M&A PERFORMANCE CAPITAL REDUCTION PORTFOLI
Slide 6: Sustainable Business Strategy
Sustainable Business Strategy Delivering value for all our stakeholders FY 2021: our impact FY 2022: continued commitment to sustainable business and transparency Our customers: 99.99% Record power uptime achieved Customers: Continued engagement on carbon reduction Sustainable business report: Secon
Slide 7: Business Update
Business Update Helios Towers FY 2021 Results 7
Slide 8: Delivering on our portfolio expansion
Delivering on our portfolio expansion Consistent delivery on our organic Acquisitions deliver our five year growth and tenancy guidance since IPO… diversification targets, well ahead of plan... Organic tenancy additions Market expansion Sites (k) +8% +7% +8% 10 13.6 (PF (PF acquisitions) 12+ acquisi
Slide 9: Acquisition update
Acquisition update Continued progress on the three announced transactions Closing / Acquired Y1 Revenues(3) Y1 Adj. EBITDA(3) Market expected closing Local leadership sites (US$m) (US$m) date Karim Ndiaye Senegal Closed: Q2 2021 Managing Director, 1,207(2) 38 19 Senegal(4) Jérôme Gautier Madagascar
Slide 10: Broader and stronger platform, primed for lease-up
Broader and stronger platform, primed for lease-up Significant portfolio expansion dilutes near-term ratios; targeted tenancy ratio expansion drives margin and ROIC 2021: 2021: PF vs. Transformational period FY 2021 Excl. recent Pro forma excl. new Adj. EBITDA margin for the Company: (Reported) acqu
Slide 11: Well-positioned to drive lease-up and returns on our enlarged platform
Well-positioned to drive lease-up and returns on our enlarged platform Lease-up drives growth & returns Towers are cash compounding assets Illustrative site ROIC(1) Illustrative cumulative tower cash flows(1) Minimal incremental OpEx Robust long-term contracts with CPI and power escalators Min
Slide 12: Organic growth in existing and announced markets
Organic growth in existing and announced markets Ongoing structural growth in our markets(1) Mobile operators targeting expansion Positive macro drivers: young, growing and urbanising populations (2021-26) “We will continue to invest in expanding and evolving +41m (2) +30m (3) +67% (2) +4.1% (4) our
Slide 13: Financial Results
Financial Results Helios Towers FY 2021 Results 13
Slide 14: Robust financial performance
Robust financial performance Continued Adj. EBITDA growth and value creation while investing substantially in portfolio expansion Adj. EBITDA (US$m)(1) Portfolio free cash flow (US$m)(2) ROIC(3) 250 241 227 169 174 168 14.4% 14.5% 13.2%(4) 205 (excl. acquisitions) 200 Deployed $373m on 11.8% 150 dis
Slide 15: Strong organic tenancy growth
Strong organic tenancy growth Sites Tenancies Tenancy Ratio +7% +30% +8% +20% +0.02x -0.17x 9,560 18,776 490 594 15,656 1,303 7,356 1,232 404 661 464 272 617 2,041 236 459 1,914 426 1,040 978 4,701 4,096 1,895 2,062 2.13x 1.96x 4,005 8,625 9,012 3,821 FY 20 FY 21 FY 20 FY 21 FY 20 FY 21 • Site count
Slide 16: Continued revenue and Adj. EBITDA expansion
Continued revenue and Adj. EBITDA expansion Revenue (US$m) Adj. EBITDA (US$m) Adj. EBITDA margin (%) +2% +8% +2% +6% -1ppt 449 241 414 2 227 1 23 13 3 28 6 1 13 3 27 13 43 43 27 26 174 176 104 101 55% 54% 167 170 105 113 (23) (29) FY 20 FY 21 FY 20 FY 21 FY 20 FY 21 • Growth driven by tenancy additi
Slide 17: Strong currency hedged business underpinned by long-term contracts with blue-chip MNOs
Strong currency hedged business underpinned by long- term contracts with blue-chip MNOs Diverse, quality customer base Strong hard-currency earnings Geographically diverse FY 2021 revenue breakdown by customer FY 2021 revenue breakdown by FX(2) FY 2021 revenue breakdown by market 1% DRC 1% 5% Airtel
Slide 18: Contracts provide effective hedge against inflation and fuel price movements
Contracts provide effective hedge against inflation and fuel price movements over a full-year cycle Price movement Adj. EBITDA impact(1) Commentary • Inflation and power price escalators embedded into contracts provides an effective hedge against fuel price movements over a full-year cycle Fuel CPI
Slide 19: Capital expenditure: Tightly controlled and focused on growth
Capital expenditure: Tightly controlled and focused on growth Capex breakdown ($m) FY 21 commentary Guidance c.650 810 - 850 • FY 21 capex of $395m, with established market capex of $153m in-line with guidance ($140m - $170m) • Non-discretionary capex of $22m at the mid-point of guidance 242 395 FY
Slide 20: Strong cash generation, reinvested into portfolio expansion
Strong cash generation, reinvested into portfolio expansion Management cash flow Commentary ($m) 2019 2020 2021 Adj. EBITDA 205 227 241 • Portfolio free cash flow of $168m, decreasing 3% YoY Non-discretionary capex (12) (17) (22) driven by higher tax payments (+$9m YoY) due to Payment of lease liabi
Slide 21: Fully funded for expansion and lowered cost of capital
Fully funded for expansion and lowered cost of capital Debt KPIs Commentary ($m) FY 20 FY 21 • Net leverage increased by +0.07x QoQ to 3.6x, the Cash & cash equivalents 429 529 low end of the Group’s medium term target range of 3.5x – 4.5x, providing capacity for announced Bond 975 975 acquisitions.
Slide 22: FY 2022: Continued growth on enlarged portfolio
FY 2022: Continued growth on enlarged portfolio 2022 and medium-term organic tenancy guidance updated to reflect portfolio expansion; growth underpinned by $3.9bn contracted revenues 2021 Actual 2022 Medium Term (enlarged portfolio) Organic +1,262 (+8%) +1,200 – 1,700 (mid-point: +8%) +1,600 – 2,100
Slide 23: Key takeaway: driving sustainable value for our stakeholders
Key takeaway: driving sustainable value for our stakeholders 1 Significant investment across 2021 and 2022; building a broader and stronger platform Structural growth opportunity supports high-quality growth & returns; 2 accelerated growth targeted in 2022 3 Continued progress against our Sustainabl
Slide 24: Q&A
Q&A Helios Towers FY 2021 Results 24
Slide 25: Investor relations
Investor relations IR Contact Chris Baker-Sams Head of Strategic Finance and Investor Relations investorrelations@heliostowers.com Upcoming IR events Date Event Mar-22 Citi, TMT Conference Mar-29 Berenberg, UK Corporate Conference Mar-30 Jefferies, Pan-Euro Mid-Cap Conference Apr-28 Helios Towers AG
Slide 26: Appendix
Appendix Helios Towers FY 2021 Results 26
Slide 27: How HT is protected against FX and cost inflation
How HT is protected against FX and cost inflation Illustration: 365 Days Case Study(1) Timeline Day 1 Day 2 ... Day 30 ... Day 90 ... Day 365 Local Currency Unit Economics Assumes 10% Fx Local Currency depreciation and 10% FX TZ / GH / ZAR / 10% fuel movement MGA / MWK 28% CPI Power Price Escalators
Slide 28: Market overview
Market overview Multinational MNOs PoS PoS Growth Mobile Towers held Airtel Africell MTN Orange Axian(4) Voda Viettel Omantel Ooredoo Additions(2) CAGR(3) Penetration(1) by MNOs(2) (2021 – 2026) (2021 – 2026) Tanzania 42% 0.6k 6.5k 8% DRC 40% 1.3k 5.7k 12% (5) Ghana 56% 0.4k 2.
Slide 29: Income Statement
Income Statement US$m 2020 2021 Revenue 414.0 449.1 Cost of sales (266.1) (295.3) Gross profit 147.9 153.8 Administrative expenses (83.5) (94.3) Loss on disposal of property, plant and equipment (8.1) (0.5) Operating profit/(loss) 56.3 59.0 Interest receivable 0.8 0.7 Other gains 40.1 (28.0) Finance
Slide 30: Balance Sheet
Balance Sheet US$m 31 December 2020 31 December 2021 Non-current assets Intangible assets 23.2 227.3 Property, plant and equipment 594.7 718.7 Right-of-use assets 109.2 161.1 Derivative financial assets 88.8 57.7 815.9 1,164.8 Current assets Inventories 9.0 10.5 Trade and other receivables 137.6 186
Slide 31: Management Cash Flow
Management Cash Flow 12 months ended 31 December US$m 2020 2021 Adjusted EBITDA 226.6 240.6 Less: Maintenance and corporate capital additions (16.6) (22.1) Payments of lease liabilities1 (25.5) (31.0) Tax paid (10.1) (19.2) Portfolio free cash flow2 174.4 168.3 Cash conversion %3 77% 70% Net payment
Slide 32: Reconciliation of Adjusted EBITDA to loss before tax
Reconciliation of Adjusted EBITDA to loss before tax US$m 2020 2021 Adjusted EBITDA 226.6 240.6 Adjusting items: Project costs1 (4.4) - Deal costs2 (8.8) (19.3) Share-based payments and long-term incentive plan charges3 (1.0) (2.0) Loss on disposal of property, plant and equipment (8.1) (0.5) Other
Slide 33: ROIC breakdown
ROIC breakdown US$m 2016 2017 2018 2019 2020 2021 Property, plant and equipment 655.1 705.7 676.6 631.9 594.7 718.7 Accumulated depreciation 272.5 383.0 490.6 597.2 713.0 833.3 Less: Accumulated maintenance and corporate capital expenditure (113.2) (135.4) (151.8) (163.9) (180.6) (202.7) Gross prope
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