Infrastrutture Wireless Italiane S.p.a. · MIL:INW
Infrastrutture Wireless Italiane — FY2023 Earnings Presentation
40 slides from Infrastrutture Wireless Italiane's earnings presentation, Mar 8, 2024
Slide 1: FY 2023 Results Presentation
FY 2023 FY 2023 Results Presentation March 8th, 2024
Slide 2: Safe Harbor
Safe Harbor This presentation contains statements that constitute forward-looking statements. These statements mentioned repeatedly in this presentation and include statements regarding the intent, belief or current expectations of the customer base, estimates regarding future growth of the business
Slide 3: Key messages of today’s presentation
Key messages of today’s presentation 1 FY 2023 results display continued execution in industrial KPIs and step change in New Services 2 Technology scenario structurally supportive, while the TLC Industry is addressing current challenges 3 Competitive advantages confirmed in best-in-class assets and
Slide 4: Q4 & FY 2023 Financial Results
Q4 & FY 2023 Financial Results 4
Slide 5: Q4 and FY highlights: continued execution
Q4 and FY highlights: continued execution Strong Expansion in Further cost Growing EBITDAaL Strong cash New Sites New PoPs efficiency Revenues margin up flow +315 +1,040 +500 +12.1% +0.8 p.p. +24% Q4’23 New sites in Q4 23 New PoPs in Q4’23 Real Estate Revenues Growth YoY Q4 YoY RFCF growth YoY Trans
Slide 6: New Sites: volumes up 2x year-on-year
New Sites: volumes up 2x year-on-year Total Macro Sites New Sites +4% (k Sites) YoY (#Sites) 905 ~2.0x 24.1 23.8 23.5 23.2 23.3 480 315 225 230 85 200 135 55 65 5 230 130 170 165 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 FY2022 FY2023 Anchors MSA Other BTS programs Highlights ▪ Con
Slide 7: Anchor PoPs: steady progress in line with MSA commitments
Anchor PoPs: steady progress in line with MSA commitments Anchors – Total PoPs Anchors - New PoPs +7% (k PoPs) YoY (PoPs) 40.8 +2.6k 40.2 39.6 38.9 LTM 38.2 715 730 650 620 640 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Anchor clients: Highlights ▪ INWIT operating model of shared di
Slide 8: OLOs’ PoPs: stable trend with new tenants from all client categories
OLOs’ PoPs: stable trend with new tenants from all client categories Other Clients – Total PoPs Other Clients - New PoPs MNOs, FWAs, Others +13% MNOs, FWAs, Others (k PoPs) YoY (PoPs) 13.5 13.1 +1.6k 12.7 12.3 LTM 11.9 530 410 400 400 350 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 M
Slide 9: New Services: material step-up achieved, capturing market opportunity
New Services: material step-up achieved, capturing market opportunity New Services Revenues Indoor Coverage Solutions assets (Eur m) ~8.0k ~450 1,000km DAS Highway and Remote Units Locations Roadway Tunnels (DAS, Small Cells) >2x in 2Y 48 Recent Commercial Wins +90% YoY 32 20 15.8 8.3 11.7 Q4'22 Q3'
Slide 10: P&L Q4 2023: solid finish to the year
P&L Q4 2023: solid finish to the year (Eur m) Q4 2022 Q3 2023 Q4 2023 YoY Highlights Total Revenues 220.5 242.0 247.1 12.1% ▪ 12% revenue growth driven by Anchor commitments, New Services and CPI One-off Revenues 0.6 0.2 0.2 Recurring Revenues 219.9 241.8 246.9 12.3% ▪ OLOs revenues impacted by lowe
Slide 11: Cash flow: structurally high cash conversion and ability to de-lever quickly
Cash flow: structurally high cash conversion and ability to de-lever quickly (Eur m) FY 2023 cash flow build up FY23 cash flow highlights RFCF growth ▪ €612m RFCF (+24% YoY) +24% YoY ▪ 70% cash conversion on EBITDA ▪ Optimization of Net Working Capital leading to €42m cash flow generation ▪ Structur
Slide 12: 2020-2023 execution track record
2020-2023 execution track record Financial Figures (Eur m) CAGR % CAGR % CAGR % ’20PF-’23 Delta % ’20PF-’23 ’20PF-’23 ’20PF-’23 +3.2 p.p YoY +9% +13% +25% 960 785 853 751 686 587 612 476 520 491 7.7% 317 367 6.3% 4.5% 4.7% Revenues EBITDAaL 1 RFCF ROCE 2 2020PF 2021A 2022A 2023A Industrial KPIs Delt
Slide 13: 2024-2026 Business Plan
INWIF 2024-2026 Business Plan
Slide 14: 2024-2026 targets: high single digit revenue growth with margin expansion
2024-2026 targets: high single digit revenue growth with margin expansion 2026E EUR m 2023A 2024E (prior guidance) 2026E Highlights • High 1-digit organic growth, among the best in industry Revenues 960.3 1,030 – 1,060 >1,200 1,160 – 1,240 • +3% Sites CAGR, +6% PoPs CAGR, >30% New Services CAGR • Sl
Slide 15: Business model ensures consistent delivery in an evolving scenario
Business model ensures consistent delivery in an evolving scenario Evolving External Scenario ▪ Continued mobile data growth ▪ Higher EMF limits, still below EU standards ▪ Structural need to improve 5G coverage and densification ▪ Italian TLC industry under pressure and evolving 1 2 Best Tower Asse
Slide 16: Best Digital Infrastructure Assets, multiple services, multiple clients
Best Digital Infrastructure Assets, multiple services, multiple clients Technology outlook paving the way for a hyper-connected society Best Digital Infrastructure Assets 1 site every 3km ~24k+ Sites >10k sites close to highways 47% Market Share1 ~5k sites close to railways Higher share in city cent
Slide 17: PoPs volumes assumption: >6% CAGR driven by +3% New Sites CAGR
PoPs volumes assumption: >6% CAGR driven by +3% New Sites CAGR New Macro Sites – MSA and other BTS programs >3% CAGR % ▪ Tenancy Ratio at 2.5x in 2026E vs 2.23x in 2023 >1.2k ~1.0k ▪ “MNO only” tenancy ratio at 1.9x in 2023E ▪ 3 BTS programs: MSA, Next Gen EU, Open Fiber >26k ~24k ▪ 2 PoPs on new MS
Slide 18: New Services: Material opportunity in DAS Indoor Coverage Solutions
New Services: Material opportunity in DAS Indoor Coverage Solutions ▪ Critical need for seamless outdoor and indoor connectivity within enterprises, large venues, public spaces and transport infrastructure ▪ DAS Technology (Distributed Antenna System): multitenant dedicated coverage and capacity, wi
Slide 19: Continuous lease cost optimisation driving margin expansion
Continuous lease cost optimisation driving margin expansion Real Estate Transaction # of Land Owned Lease Cost per Site Total Revenues and EBITDAaL per site Real estate transactions # €k €k 5% 7% CAGR CAGR ’23-’26 ’23-’26 ~46 2.2k 1.8k >5.0k >20% 8.3 39.8 8.0 36.8 <7.5 ~35 28.4 ~50% 25.3 ~60% 11% ~8
Slide 20: CapEx plan with 2-digit IRR, peak in 2024 due to New Sites
CapEx plan with 2-digit IRR, peak in 2024 due to New Sites Capex Plan supporting material EBITDAaL growth ’24-’26 Capex Breakdown CapEx EBITDAaL Growth1 (Eur m) (Eur m) Maintenance ~800 ~1,450 Other New Sites and upgrade ~30% >430 EBITDAaL €~800m Growth / Capex CapEx SC/DAS 678 ’24-’26 >220 3.3x Cap
Slide 21: Structurally high cash flow conversion
Structurally high cash flow conversion ▪ Highly visible EBITDAaL growth, low recurring capex, stable to positive net working capital leading to structurally high cash flow conversion (>65%) ▪ 2024 Recurring Free Cash Flow reflects EBITDAaL growth, positive Net Working Capital (lower yoy), higher tax
Slide 22: De-leveraging, shareholder remuneration and balance sheet optionality
De-leveraging, shareholder remuneration and balance sheet optionality ▪ Capital allocation framework confirmed, targeting leverage at 5.0x-5.5x Net Debt / EBITDA ▪ Full execution of enhanced shareholder remuneration policy in 2024: DPS +7.5% + additional Eur 100m dividends + completion of Eur 300m S
Slide 23: Concluding remarks
Concluding remarks Resilient organic growth based on high visibility MSAs with two tier-1 Anchors and multiple services, client categories Opportunity to capture market growth in DAS Indoor Coverage Solutions Lease cost efficiency driving continued expansion of EBITDAaL margins Material CapEx plan a
Slide 24: Annex
INWIF Annex
Slide 25: External scenario: supportive technology trends
External scenario: supportive technology trends ▪ 5G deployment: current focus on Macro Sites 3.5GHz deployment in urban areas, suburban areas to follow ▪ DAS: growing indoor deployment to manage 5G lower propagation and capacity /coverage shortfalls in high mobile traffic & dense areas ▪ Small Cell
Slide 26: Key strategic pillars to confirm leadership in the digital infrastructure market
Key strategic pillars to confirm leadership in the digital infrastructure market Macro Grid Anchors Macro Grid OLOs Micro Grid Real Estate Partner Boost Growth Develop Optimise with Anchors for DAS indoor coverage clients’ demand land ownership & Efficient 5G and large projects proactively leases de
Slide 27: Strong Anchor MSAs with committed growth and downside protection
Strong Anchor MSAs with committed growth and downside protection Anchors MSAs supporting long-term visibility Preferred Supplier (DAS, New Services) Committed Growth (New Sites, New PoPs) Committed Inflation (CPI) Cumulative Fixed fee / Base MSA 2023A 2024E 2026E 2030E ▪ Strong MSAs with two tier-1
Slide 28: Cost efficiency across the board
Cost efficiency across the board % Land Owned EBITDAaL Margin % ▪ Continued work on lease cost, tracking ahead of cost reduction targets 2023A 2026E 2023A 2026E Ground Lease ▪ Strong track record in lease cost reduction despite inflation link cost kicking-in and broader asset base ▪ Expansion of lan
Slide 29: Growth opportunity for Towers in core business and adjacent markets
Growth opportunity for Towers in core business and adjacent markets HIgh Macro grid IoT - Hosting Towers Competitive Advantage Micro – grid outdoor (small cells) Micro-grid indoor (DAS/Repeaters) Active Equipment IoT - Platform Large dedicated coverage projects Backhauling Edge Data center Private N
Slide 30: P&L FY 2023: industry-leading organic EBITDAaL growth
P&L FY 2023: industry-leading organic EBITDAaL growth (Eur m) FY 2022 FY 2023 YoY Highlights Total Revenues 853.0 960.3 12.6% ▪ Solid organic growth with steady quarterly delivery One-off Revenues 0.6 0.6 ▪ MSA commitments, volume and pricing trend in OLOs Recurring Revenues 852.4 959.7 12.6% ▪ New
Slide 31: Asset and cost optimization continues with tangible results
Asset and cost optimization continues with tangible results Tenancy ratio Lease cost per site1 EBITDAaL per site2 (€k) (€k) 27.2 29.2 29.7 8.0 8.3 7.9 2.16 2.21 2.23 Q4'22 Q3'23 Q4'23 Q4'22 Q3'23 3 Q4'23 Q4'22 Q3'23 Q4'23 EBITDAaL 71% 72% 72% margin Best in class tenancy ratio Strong track record Ma
Slide 32: Strong protection in inflationary environment
Strong protection in inflationary environment Inflation impact on key variables % of 2023 Key Figures CPI link mechanics Revenues Inflation sensitivity: Revenues 100% +1% inflation equals >€5m EBITDAaL 100% linked to prior-year avg CPI Anchor MSA macro site 82% (0% floor, no cap) OLOs, New Services,
Slide 33: Sustainability Plan: ESG commitment
Sustainability Plan: ESG commitment E S G TOWER AS A SERVICE ▪ 2040 Net Zero target approval by SBTi ▪ + 900 infrastructures ▪ ESG target in MBO/ LTI progess ▪ ISO 50001 Certification ▪ 448 hospitalities in white/vulnerable areas ▪ 81% expenditure covered by ESG 2023 questionarie ▪ 98% materials rec
Slide 34: ESG: overview of Ratings and Index Memberships
ESG: overview of Ratings and Index Memberships ESG Index Membership 34
Slide 35: Data book: Cumulated P&L
Data book: Cumulated P&L 3M20 6M20 9M20 FY20 3M21 6M21 9M21 FY21 3M22 6M22 9M22 FY22 3M23 6M23 9M23 FY23 Currency: €m (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) Revenues 103.0 287.4 4
Slide 36: Data book: Quarterly P&L
Data book: Quarterly P&L Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Currency: €m (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) (Jan-Mar) (Apr-Jun) (Jul-Sep) (Oct-Dec) Revenu
Slide 37: Data book: Balance Sheet
Data book: Balance Sheet 3M20 6M20 9M20 FY20 3M21 6M21 9M21 FY21 3M22 6M22 9M22 FY22 3M23 6M23 9M23 FY23 Currency: €m (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) Goodwill 6,712 6,113 6
Slide 38: Data book: Cash Flow
Data book: Cash Flow 3M20 6M20 9M20 FY20 3M21 6M21 9M21 FY21 3M22 6M22 9M22 FY22 3M23 6M23 9M23 FY23 Currency: €m (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) EBITDA Recurring 86.3 259.
Slide 39: Data book: Operational KPIs
Data book: Operational KPIs 1 3 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 3M20 6M20 9M20 FY20 3M21 6M21 9M21 FY21 3M22 6M22 9M22 FY22 3M23 6M23 9M23 FY23 Figures in #k (Jan-Mar) (jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan-Jun) (Jan-Sep) (Jan-Dec) (Jan-Mar) (Jan
Slide 40: More questions? Ask Investor Relations
More questions? Ask Investor Relations Fabio Ruffini Head of Investor Relations & Corporate Development fabio.ruffini@inwit.it ir@inwit.it 40
Infrastrutture Wireless Italiane S.p.A. (INWIT) — FY2023 Earnings Presentation on 6ix