Helios Towers PLC · LSE:HTWS
Helios Towers — H1 2024 Earnings Presentation
34 slides from Helios Towers's earnings presentation, Aug 8, 2024
Slide 1: H1 2024 Results
H1 2024 Results 8 August 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 H1 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 Strong tenancy Adj. EBITDA & ROIC Strengthened FY 24 guidance additions & tenancy growth ahead of financial position tightened upwards(3) ratio expansion expectations • +1,649 YTD tenancy additions • +11% YoY H1 revenue growth • Net leverage reduction of -0.6x • 1,900 - 2,100 tena
Slide 6: Progressing towards high-end of full-year guidance
PROGRESSING TOWARDS HIGH-END OF FULL-YEAR GUIDANCE Organic tenancy additions (#) Adj. EBITDA (US$m) PFCF and ROIC (US$m/ %) Tenancy ratio Adj. EBITDA margin 1.81x 1.91x 2.01x 50% 51% 53% 2,433 416 410 - 420 280 – 290 287 1,900 – 2,100 Initial guidance: 268 370 Initial guidance: 405 – 420 275 – 290 I
Slide 7: Tenancy ratio expansion driving ROIC and free cash flow growth
TENANCY RATIO EXPANSION DRIVING ROIC AND FREE CASH FLOW GROWTH Our target: Tenancy 2.13x ratio 2.01x 1.96x 1.91x ROIC 14.5% 1.81x 12.9% 11.8% 12.0% 10.3% New market Senegal Malawi acquisitions Madagascar Oman 14k 14k 14k Sites 10k 7k FY 20 FY 21 FY 22 FY 23 H1 24 FY 24 - 26 Free cash flow ($71m) ($3
Slide 8: Capital allocation priorities
CAPITAL ALLOCATION PRIORITIES Capital allocation policy focused on growing portfolio free cash flow while consistently delivering ROIC above our cost of capital Current priorities: Optimised organic Capital efficient investments accretive to ROIC – colocations, 1 investments operational efficiencies
Slide 9: Oman deep-dive: attractive market dynamics and customer service focus
OMAN DEEP-DIVE: ATTRACTIVE MARKET DYNAMICS AND Executive Leadership: CUSTOMER SERVICE FOCUS DELIVERING TENANCY RATIO Philippe Loridon Jadawy Al Riyamy EXPANSION AND +46% ADJ. EBITDA GROWTH Regional CEO – ME, E&W Africa MD HT Oman Instilling business excellence in Oman Tenancies (#) Adjusted EBITDA (
Slide 10: Sustainable business strategy update
SUSTAINABLE BUSINESS STRATEGY UPDATE Impact KPI Mgmt. FY 23 H1 24 FY 26 • Power uptime reached a year-to-date comp record of 99.99% • Population coverage +5m, driven by Developing talent % staff trained in Lean Six Sigma Enabler 53% ✓ 54% 70% site additions and population growth Local teams % local
Slide 11: Financial results
Financial results Ituri, DRC
Slide 12: Operational & financial highlights
OPERATIONAL & FINANCIAL HIGHLIGHTS YoY QoQ In US$m, unless otherwise stated H1 2024 H1 2023 YoY Q2 2024 Q1 2024 QoQ Sites (#) 14,185 13,870 +2% 14,185 14,166 +0% Tenancies (#) 28,574 25,883 +10% 28,574 27,686 +3% Tenancy ratio (x) 2.01x 1.87x +0.14x 2.01x 1.95x +0.06x Revenue 390 350 +11% 195 195 +0
Slide 13: Q2 2024: structural growth supporting strong tenancy additions
Q2 2024: STRUCTURAL GROWTH, LEADING MARKET POSITIONS AND CUSTOMER SERVICE FOCUS SUPPORTING STRONG TENANCY ADDITIONS Sites Tenancies Tenancy ratio +2% +10% +0.14x 13,870 14,185 28,574 2.01x 25,883 1.87x 2,519 2,546 3,978 3,192 5,002 5,209 11,230 10,357 6,349 6,430 12,334 13,366 Q2 23 Q2 24 Q2 23 Q2 2
Slide 14: Q2 2024: tenancy growth delivering +17% Adj. EBITDA expansion
Q2 2024: TENANCY GROWTH DELIVERING +17% ADJUSTED EBITDA EXPANSION Revenue (US$m) Adj. EBITDA (US$m) Adj. EBITDA margin (%) +9% +17% +3ppt 195 104 179 89 12 17 14 9 98 49 86 41 53% 50% 79 81 49 52 -10 -9 Q2 23 Q2 24 Q2 23 Q2 24 Q2 23 Q2 24 • Revenue of 9% driven predominantly by • Adj. EBITDA growth
Slide 15: Adj. EBITDA growth correlated to tenancy additions, resilient to FX, CPI
ADJ. EBITDA GROWTH IS HIGHLY CORRELATED TO TENANCY ADDITIONS AND RESILIENT TO FX, CPI AND POWER PRICE MOVEMENTS Q2 24 YoY revenue walkthrough(1,2) Q2 24 YoY Adj. EBITDA walkthrough(1) (US$m) (US$m) +9% +17% 18 1 6 (10) 14 1 4 (4) Fx impact mitigated through Driven by Tanzania shilling and 72% hard-c
Slide 16: On target for neutral free cash flow in FY 2024
ON TARGET FOR NEUTRAL FREE CASH FLOW IN FY 2024 Management cash flow, YTD ($USm) ($USm) 15 18 4 (59) (23) Commentary (26) (15) (41) (28) • H1 24 portfolio free cash flow of $142m, (68) Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 driven by tenancy additions driving Adj. EBITDA growth and timing of tax 206 pa
Slide 17: Capex is tightly controlled and focused on accretive opportunities
CAPEX IS TIGHTLY CONTROLLED AND FOCUSED ON ACCRETIVE OPPORTUNITIES FY 24 H1 24 Capex breakdown (US$m) FY 23 H1 24 updated Guidance • H1 24 capex of $80m, of which $23m non-discretionary, in line with Acquisitions 20 6 expectations Growth 113 38 FY 24 guidance Upgrade 35 14 • Capex guidance updated t
Slide 18: Navigating higher rate environment with bond refinancing
SUCCESSFULLY NAVIGATING THE HIGHER RATE ENVIRONMENT WITH BOND REFINANCING Raised $850m 5YR Bond with a 7.5% coupon – extending our maturities with a minimal increase in cost of debt Strengthened financial position Debt maturity profile extended (US$m) extended weighted average Group facilities: +2yr
Slide 19: Strong financial position with largely fixed rate debt
STRONG FINANCIAL POSITION WITH LARGELY FIXED RATE DEBT AND NO NEAR-TERM MATURITIES Debt KPIs 2 Q2 23 Q1 24 Q2 24 Commentary Cash & cash equivalents 128 89 145 • Net leverage decreased by -0.6x YoY to Bond (Dec-25) 975 650 850 4.2x; target below 4.0x in FY 24 Convertible bond(1) (Mar-27) 247 247 247
Slide 20: FY 2024 guidance tightened upwards
FY 2024 GUIDANCE TIGHTENED UPWARDS FY 23 H1 24 FY 24 YoY Actual Actual Updated guidance(1) Growth(3) Organic tenancy additions +2,433 +1,649 +1,900 - 2,100 +7% - 8% (Prior: +1,600 – 2,100) Adj. EBITDA $370m $416m $410m - $420m +11% - 14% (annualised) (Prior: $405m – $420m) PFCF $268m $287m $280m - $
Slide 21: Key takeaways
KEY TAKEAWAYS ✓ ✓ ✓ ✓ ✓ ✓ Consistent and strong Strong Adj. EBITDA growth, FY 24 guidance tightened tenancy additions ROIC expansion and upwards; focused on capital (+1,649 YTD/ +2,691 YoY) continued deleveraging efficient organic growth, ROIC expansion and deleveraging 21 Helios Towers H1 2024 Resu
Slide 22: Q&A Thank you
Q&A Thank you Jërëjëf Medaase Zikomo Merci Matondi Asante Misaotra Shukranًشكرا Siyabonga Matondo Dakar, Senegal
Slide 23: Investor Relations
INVESTOR RELATIONS Upcoming IR events Event IR Contact 3 September Barclays Media and Telecom Forum Chris Baker-Sams Head of Strategic Finance and 5 September dbAccess European TMT Conference Investor Relations investorrelations@heliostowers.com 17 to 19 September JP Morgan Emerging Markets Credit C
Slide 24: Appendix
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Slide 25: 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 26: Q2 2024 sites & tenancies and population coverage
Q2 2024 SITES & TENANCIES AND POPULATION COVERAGE Population Sites Tenancies Tenancy ratio coverage H1 Q2 Q1 Q2 Q2 Q1 Q2 Q2 Q1 Q2 YoY QoQ YoY QoQ YoY QoQ 24 23 24 24 23 24 24 23 24 24 Tanzania 42m 4,193 4,180 4,176 (17) (4) 9,535 9,984 10,308 773 324 2.27x 2.39x 2.47x 0.20x 0.08x Senegal 12m 1,386 1
Slide 27: 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 H1 24 revenue breakdown by customer H1 24 revenue breakdown by FX H1 24 site breakdown by segment 2% Largest customers 18% Airtel Afri
Slide 28: Income statement
INCOME STATEMENT 6 months ended 30 June US$m 2024 2023 Revenue 389.9 350.2 Cost of sales (188.9) (218.5) Gross profit 201.0 131.7 Administrative expenses (68.8) (62.9) Profit on disposal of property, plant and equipment 0.1 0.5 Operating profit 132.3 69.3 Interest receivable 0.9 0.7 Other gains and
Slide 29: Balance sheet
BALANCE SHEET US$m 30 June 2024 31 December 2023 Non-current assets Intangible assets 519.9 546.4 Property, plant and equipment 940.6 918.3 Right-of-use assets 241.7 254.0 Deferred tax asset 10.6 13.6 Derivative financial assets 13.5 6.3 1,726.3 1,738.6 Current assets Inventories 13.4 12.7 Trade and
Slide 30: Management cash flow
MANAGEMENT CASH FLOW 6 months ended 30 June US$m 2024 2023 Adjusted EBITDA 206.2 173.8 Less: Maintenance and corporate capital additions (22.6) (18.4) Payments of lease liabilities(1) (26.2) (24.7) Tax paid (15.4) (6.2) Portfolio free cash flow 142.0 124.5 Cash conversion %(2) 69% 72% Net payment of
Slide 31: Reconciliation of Adjusted EBITDA to loss before tax
RECONCILIATION OF ADJUSTED EBITDA TO LOSS BEFORE TAX 6 months ended 31 December US$m 2024 2023 Adjusted EBITDA 206.2 173.8 Adjustments applied in arriving at Adjusted EBITDA Adjusting items: Deal costs(1) (1.2) (2.2) Share-based payments and long-term incentive plans(2) (4.6) (1.0) Other/Restructuri
Slide 32: ROIC breakdown
ROIC BREAKDOWN US$m 2020 2021 2022 2023 H1 24 Property, plant and equipment 594.7 708.2 907.9 918.3 940.6 Accumulated depreciation 713.0 833.3 934.0 1,127.5 1,118.2 Accumulated maintenance and corporate capital expenditure (180.6) (202.7) (224.8) (260.3) (283.0) Intangible assets 23.2 231.4 575.2 54
Slide 33: Leading ESG credentials
LEADING ESG CREDENTIALS Third ‘AAA’ ESG rating from MSCI, Mar 24 FTSE4Good Index inclusion, Jul 24 Scored B, Feb 24 Gold rating, Feb 24 (the highest possible score from MSCI) (for a third consecutive year) (2023 rating reaffirmed) (rated top 5% of telecoms industry) ESG Risk Rating of 16.8 (Low Risk
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