This announcement contains inside information for the purpose of Article 7 of the Market Abuse Regulation (EU) 596/2014, as it forms part of retained EU law
Helios Towers plc announces results for the year ended 31 December 2020
- Full year results in line with expectations
- Business underpinned by long-term contracted revenues with blue-chip mobile network operators
London, 10 March 2021: Helios Towers plc (‘the Company’ and together with its subsidiaries ‘Helios Towers’ or ‘the Group’), the independent telecommunications infrastructure company, today announces results for the year to 31 December 2020.
|FY 2020||FY 2019||Change||Q4 2020||Q3 2020||Change|
|Adjusted EBITDA (US$m)1||226.6||205.2||+10%||60.1||57.4||+5%|
|Adjusted EBITDA margin1||55%||53%||+2ppt||57%||55%||+2ppt|
|Operating Profit / (Loss) (US$m)||56.3||(4.5)||+60.8||10.9||16.1||(5.2)|
|Portfolio free cash flow (US$m)1||174.4||168.9||+3%||41.1||44.2||(7)%|
|Net debt at end of period (US$m)1||692.4||626.5||+11%||692.4||662.2||+5%|
1. Alternative Performance Measures are described in our defined terms and conventions.
2. Calculated as net debt divided by last quarter annualised Adjusted EBITDA for the period.
- Full year Group revenue increased by 7% year-on-year to US$414.0m (2019: US$387.8m), driven by the continued growth in the number of sites and tenancies across the Group.
- Q4 2020 Group revenue increased by 2% quarter-on-quarter to US$106.1m (Q3 2020: US$103.6m).
- Full year Adjusted EBITDA increased by 10% year-on-year to US$226.6m (2019: US$205.2m), driven by tenancy growth and continued improvements in operational efficiency, with Adjusted EBITDA margin expanding to 55% (2019: 53%), up 2ppts.
- Q4 2020 Adjusted EBITDA increased by 5% quarter-on-quarter to US$60.1m (Q3 2020: US$57.4m).
- Full year operating profit increased by US$60.8m year-on-year to US$56.3m (2019: US$-4.5m).
- Q4 2020 operating profit decreased by US$5.2m quarter-on-quarter to US$10.9m (Q3 2020: US$16.1m), driven by a loss on disposal of PPE related to our site consolidation program.
- Portfolio free cash flow increased by 3% year-on-year to US$174.4m (2019: US$168.9m).
- Q4 2020 portfolio free cash flow decreased by -7% quarter-on-quarter to US$41.1m (Q3 2020: US$44.2m) reflecting timing of capex and corporate income tax payments.
- Net leverage of 2.9x remained flat year-on-year and quarter-on-quarter (2019 and Q3 2020: 2.9x), below the Group’s target range of 3.5x–4.5x.
- Business underpinned by long term contracted revenues of US$2.8bn, of which 82% is from Africa’s Big-Five MNOs, with an average remaining life of 6.8 years.
- Helios Towers continues to monitor the impact of COVID-19 on its operations. The telecommunications sector has been classified as an ‘essential service’ in our markets, allowing us to operate at our normal high levels of service. To date, there has been minimal impact on the Group’s delivery of service and operational execution.
- Operational performance continues at very high levels, with power uptime of 99.99% recorded in Q4 2020 for a third consecutive quarter.
- Tenancies increased by 1,065 tenants year-on-year to 15,656 tenants (2019: 14,591 tenants). Q4 2020 tenancies increased by 574 quarter-on-quarter (Q3 2020: 15,082).
- Sites increased by 382 sites year-on-year to 7,356 sites (2019: 6,974 sites). Increase of 134 sites quarter-on-quarter (Q3 2020: 7,222).
- Tenancy ratio of 2.13x increased by 0.04x quarter-on-quarter and year-on-year (2019 and Q3 2020: 2.09x).
- As previously reported, on 12 August 2020 Helios Towers signed an agreement with Free Senegal, the second largest mobile operator in Senegal, to acquire its 1,220 tower portfolio, as well as 400 build-to-suit sites (‘BTS’) committed over the next 5 years. The acquisition is anticipated to close in H1 2021.
- The Senegal transaction enables the Group to enter a new market, representing the first key milestone against our 2025 strategic ambitions to increase our operational presence to 8+ markets. The acquired sites represent c.25% of the Group’s total targeted site expansion to reach our 2025 strategic target of 12,000+ sites, with further progress expected through the 400 committed BTS.
- The Group continually monitors growth opportunities which are in line with its strategy, and is actively investigating an aggregated M&A pipeline of over 10,000 towers. The Group is currently in advanced discussions regarding the acquisition of approximately 5,000 towers in new geographies across the Africa and Middle East region. Of these, the Group is in advanced negotiations with respect to approximately 2,000 towers across multiple African markets and is in the advanced stages of a competitive process with respect to the remainder. There is no guarantee that these or any other acquisitions currently under contemplation will ultimately be agreed or completed, and until acquisitions are agreed their terms remain confidential. Any transactions agreed by Helios Towers would be expected to be consistent with the Group’s acquisition criteria, to be value accretive and to have a financing structure aligned to the Group’s target leverage range of 3.5x-4.5x.
Environmental, Social & Governance (ESG)
- The Group will publish its first Sustainable Business Report on 15 March 2021 alongside its 2020 Annual Report. The report provides a detailed review of the Group’s progress against its strategic objectives and ambitions.
- On 19 November 2020 Helios Towers unveiled its integrated Sustainable Business Strategy, including its long term targets and contribution to the UN Sustainable Development Goals. The presentation can be found at: www.heliostowers.com/investors/results-reports-and-presentations/
- Helios Towers’ Sustainable Business Strategy is designed to help the Group maximise the positive impact it is having for all its stakeholders, and deliver on its purpose of driving the growth of communications in Africa.
Guidance and outlook
- Helios Towers is targeting 1,000 – 1,500 organic tenancies per annum in the medium term in its existing markets, in-line with the Company’s guidance first provided during its IPO in October 2019.
- Targeting US$110m – US$140m of capex for its existing markets in 2021, of which US$20m – US$25m is non-discretionary capex.
- Acquisition of Free Senegal’s passive infrastructure assets is anticipated to close in H1 2021, representing 1,220 sites for an upfront cash consideration of €160m (US$194m). Annualised revenues and Adjusted EBITDA for the acquired assets are anticipated to be US$38m and US$19m, respectively. Further growth is expected through colocation lease-up and 400 committed BTS over the next five years, for which €40m (US$48m) deferred consideration and €30m (US$36m) growth capex are expected to be paid, and colocation lease-up.
Kash Pandya, Chief Executive Officer, said:
“We are delighted with the team’s achievements in our first full year as a publicly listed company and against the backdrop of the global COVID-19 pandemic. We delivered results in-line with guidance set out at the beginning of the year, achieved record customer service levels, announced entry into our sixth market and increased available funding while significantly reducing our cost of debt. We also launched our sustainable business strategy, which reflects our ambition to contribute to the social and economic development across Africa through mobile connectivity, while minimising environmental impact.
Through all of these achievements, we have set the foundations for an exciting 2021 and look forward to delivering another year of sustainable growth and operational excellence for all stakeholders.”
Chris Baker-Sams - Corporate Finance Manager
+44 (0)752 310 1475
Edward Bridges / Stephanie Ellis
FTI Consulting LLP
+44 (0)20 3727 1000
For the purposes of MAR, the person responsible for making this announcement is Paul Barrett, General Counsel and Company Secretary.
Helios Towers’ management will host a conference call for analysts and institutional investors at 09.30 GMT on Thursday, 11 March 2021. Dial in details for the conference call are:
- Europe & International: +44 20 3936 2999
- South Africa (local): 087 550 8441
- USA (local): 1 646 664 1960
- Passcode: 175364
About Helios Towers
Helios Towers is a leading independent telecommunications infrastructure company in Africa, having established one of the continent's most extensive tower portfolios with over 7,300 towers across five countries. It builds, owns and operates telecom passive infrastructure, providing services to mobile network operators.
Helios Towers owns and operates telecommunication tower sites across Africa in Tanzania, Democratic Republic of Congo (‘DRC’), Congo Brazzaville, Ghana, South Africa and are due to establish a presence in Senegal in H1 2021.
Helios Towers pioneered the model in Africa of buying towers that were held by single operators and providing services utilising the tower infrastructure to the seller and other operators. This allows wireless operators to outsource non-core tower-related activities, enabling them to focus their capital and managerial resources on providing higher quality services more cost-effectively.
Forward looking statements
This announcement contains forward-looking statements which are subject to known and unknown risks and uncertainties because they relate to future events, many of which are beyond the Group’s control. These forward-looking statements include, without limitation, statements in relation to the Group’s financial outlook and future performance. No assurance can be given that future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Group. You are cautioned not to rely on these forward-looking statements, which speak only as of the date of this announcement. The Company undertakes no obligation to update or revise any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances. Nothing in this presentation is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of the Company or the Group or their businesses.
Use of non-GAAP financial information
This announcement also contains non-GAAP financial information, described in this announcement as ‘Alternative Performance Measures (APMs) which the Directors believe is valuable in understanding the performance of the Group. However, non-GAAP information is not uniformly defined by all companies and therefore it may not be comparable with similarly titled measures disclosed by other companies, including those in the Group's industry. Although these measures are important in the assessment and management of the Group’s business, they should not be viewed in isolation or as replacements for, but rather as complementary to, the comparable GAAP measures.