Helios Towers PLC · LSE:HTWS
Helios Towers — H1 2022 Earnings Presentation
32 slides from Helios Towers's earnings presentation, Aug 18, 2022
Slide 1: H1 2022 Results
H1 2022 Results 18 August 2022 Strong H1 22 operational and financial performance; FY 22 outlook reiterated
Slide 2: Helios Towers team today
Helios Towers team today Manjit Dhillon Tom Greenwood Chris Baker-Sams Chief Financial Officer Chief Executive Officer Head of Strategic Finance and Investor Relations Helios Towers H1 2022 Results 2
Slide 3: Agenda
Agenda 1. H1 2022 Highlights 2. Financial Results 3. Q&A Helios Towers H1 2022 Results 3
Slide 4: H1 2022 Highlights
H1 2022 Highlights Helios Towers H1 2022 Results 4
Slide 5: H1 2022: Highlights
H1 2022 HIGHLIGHTS FINANCIAL RESULTS H1 2022: Highlights Strong financial performance driven by consistent operational execution, ongoing structural growth and robust business model 1 2 3 4 CONSISTENT AND STRONG CONTINUED ROBUST FINANCIAL FY 2022 GUIDANCE ORGANIC TENANCY TRANSFORMATION PERFORMANCE R
Slide 6: Continued organic and inorganic platform expansion driving growth
H1 2022 HIGHLIGHTS FINANCIAL RESULTS H1 2022: Continued organic and inorganic platform expansion driving growth Tenancies Adj. EBITDA Portfolio free cash flow (#) (US$m) (US$m) Tenancy ratio Adj. EBITDA Margin Cash conversion(1) 2.13x 1.96x 1.92x 55% 54% 50% 77% 70% 74%(2) 202 20,549 278 18,776 241
Slide 7: Well-positioned for growth and returns amid broader global macro volatility
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Well-positioned for growth and returns amid broader global macro volatility Customers continue Strong GDP growth forecast, with Accelerating mobileto benefit subs long- growth; Contracted revenues with structural termoperators structural growthto invest some mark
Slide 8: H1 2022: Acquisition update
H1 2022 HIGHLIGHTS FINANCIAL RESULTS H1 2022: Acquisition update Successful integration of assets across Senegal, Madagascar and Malawi; Oman and Gabon transactions targeted to close in H2 22 Closing / Acquired Acquired Local Acquired Market expected closing Revenues(1) Adj. EBITDA(1) leadership sit
Slide 9: Acquisition integration: Senegal case study
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Acquisition integration: Senegal case study Since closing the acquisition in Senegal one year ago, the business Executive Leadership: has delivered robust operational and financial performance Philippe Loridon Karim Ndiaye Regional CEO – MD HT Senegal ME, E&W Afr
Slide 10: Sustainable Business Strategy
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Sustainable Business Strategy Committed to the highest levels of reporting Sustainable Business Strategy and transparency progressing Second sustainable business Target KPI FY 21 H1 22 FY 26 report published in Mar-22 Reliable mobile Downtime per tower 1m10s 1m34
Slide 11: Financial Results
Financial Results Helios Towers H1 2022 Results 11
Slide 12: H1 2022: Strong operational and financial performance
H1 2022 HIGHLIGHTS FINANCIAL RESULTS H1 2022: Strong operational and financial performance YoY QoQ In US$m, unless H1 22 H1 21 % change Q2 22 Q1 22 % change otherwise stated Revenue 265 212 +25% 138 128 +8% Adj. EBITDA(1) 136 114 +19% 69 67 +4% Adj. EBITDA margin (%) 51% 54% -3ppt 50% 52% -2ppt Port
Slide 13: Q2 2022: Consistent and strong tenancy growth
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Q2 2022: Consistent and strong tenancy growth Sites Tenancies Tenancy ratio +9% +24% +9% +20% 0.0x -0.07x 10,694 20,549 723 1,144 8,603 488 586 1,278 17,090 1,348 1,264 576 669 1,207 347 479 411 2,173 247 629 431 1,093 1,952 986 4,841 2,153 4,185 1,915 1.99x 1.92
Slide 14: Q2 2022: Continued revenue and Adj. EBITDA expansion
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Q2 2022: Continued revenue and Adj. EBITDA expansion Revenue (US$m) Adj. EBITDA (US$m) Adj. EBITDA margin (%) +14% +27% +9% +19% -2% -3ppt 69 2 138 58 1 5 1 7 1 2 3 109 4 3 6 2 9 6 5 7 2 7 10 25 11 25 50 53.7% 50.3% 43 49 29 33 42 Q2 21 Q2 22 (7) (8) Q2 21 Q2 22
Slide 15: Structural hard currency earnings and contractual escalators provide earnings protection
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Structural hard currency earnings and contractual escalators provide effective earnings protection Q2 22 YoY inflation and FX movements Q2 22 YoY revenue walkthrough(3) (%) (US$m) Macro movement: YoY movement: HT protections: Overall market(1): +27% Local fuel +3
Slide 16: Diversified business underpinned by long-term contracts with blue-chip MNOs
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Diversified business underpinned by long-term contracts with blue-chip MNOs Diverse, quality customer base Robust hard-currency earnings Geographically diverse H1 2022 revenue breakdown by customer H1 2022 revenue breakdown by FX H1 2022 revenue breakdown by mark
Slide 17: Strong portfolio free cash flow, reinvested into platform expansion
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Strong portfolio free cash flow, reinvested into platform expansion Management cash flow Commentary ($m) H1 21 H1 22 Adj. EBITDA 114 136 • H1 22 portfolio free cash flow of $100m, increasing Non-discretionary capex (14) (9) 36% YoY, and 21% on an organic basis Pa
Slide 18: Capital expenditure: Tightly controlled and focused on accretive growth
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Capital expenditure: Tightly controlled and focused on accretive growth Capex breakdown ($m) Commentary Total FY capex: 810 - 850 H1 22 • H1 22 capex of $132m, including $43m acquisition capex, Organic Acquisitions FY 22 principally related to the Malawi acquisit
Slide 19: Strong balance sheet and fully funded for acquisitions
H1 2022 HIGHLIGHTS FINANCIAL RESULTS Strong balance sheet and fully funded for acquisitions Debt KPIs Commentary ($m) Q2 21 Q1 22 Q2 22 • Net leverage increased by +0.7x YoY and +0.2x QoQ to 3.9x, comfortably within the Group’s medium term Cash & cash equivalents 640 483 389 target range of 3.5x - 4
Slide 20: FY 22 outlook: Guidance reiterated
H1 2022 HIGHLIGHTS FINANCIAL RESULTS FY 22 outlook: Guidance reiterated Medium term H1 22 FY 22 guidance (enlarged portfolio) Organic tenancy additions +675 organic tenancies of which, c.61% new sites +1,200 – 1,700 (mid-point: +8%) of which, c.60% new sites +1,600 – 2,100 Gradually reducing from
Slide 21: H1 2022: Takeaways
H1 2022 HIGHLIGHTS FINANCIAL RESULTS H1 2022: Takeaways 1 Strong H1 2022 operational and financial performance Resilient business through macro volatility; structural growth, high-quality 2 base of earnings with contractual inflation protections, strong balance sheet and fully funded for announced t
Slide 22: Q&A
Q&A Helios Towers H1 2022 Results 22
Slide 23: Investor relations
Investor relations IR Contact Chris Baker-Sams Head of Strategic Finance and Investor Relations [email protected] Recent IR event Date Event 05-May Capital Markets Day Upcoming IR events Date Event 09-Sep Bank of America Infrastructure Conference 19-Sep EFG Hermes Annual One on One
Slide 24: Appendix
Appendix Helios Towers H1 2022 Results 24
Slide 25: Our five-year strategic target – "22 by 26"
Our five-year strategic target – “22 by 26” Margin and scale growth driven by significant organic and inorganic pipelines 2022 2023 – 2026 2026 Longer-term: 60%–65% Target Adj. EBITDA margin: 51%–53% 1–2ppt p.a. 55%–60% Adj. EBITDA margin We have achieved our five-year strategic goals laid out at IP
Slide 26: Market overview
Market overview PoS PoS Growth Mobile Towers held by Sites Tenancy ratio # MNOs Additions(3) CAGR(4) Penetration(2) MNOs(3) (2021 – 2026) (2021 – 2026) Tanzania 4,133 2.2x 4+ 42% 0.6k 6.5k 8% DRC 2,153 2.2x 4 40% 1.3k 5.7k 12% Ghana 1,093 2.0x 3 56% 0.4k 2.7k 5% Senegal 1,278 1.1x 3 53% 2.7k 1.8k 7%
Slide 27: Income Statement
Income Statement 6 months ended 30 June US$m 2022 2021 Revenue 265.4 212.4 Cost of sales (173.6) (138.4) Gross profit 91.8 74.0 Administrative expenses (52.6) (43.9) Profit / (loss) on disposal of property, plant and equipment 0.6 (3.2) Operating profit 39.8 26.9 Interest receivable 0.4 0.2 Other ga
Slide 28: Balance Sheet
Balance Sheet US$m 30 June 2022 31 December 2021 Non-current assets Intangible assets 233.3 227.3 Property, plant and equipment 750.1 718.7 Right-of-use assets 164.8 161.1 Derivative financial assets 0.2 57.7 1,148.4 1,164.8 Current assets Inventories 13.5 10.5 Trade and other receivables 248.1 186.
Slide 29: Management Cash Flow
Management Cash Flow 6 months ended 30 June US$m 2022 2021 Adjusted EBITDA 136.1 114.2 Less: Maintenance and corporate capital additions (9.3) (14.3) Payments of lease liabilities1 (20.0) (15.2) Tax paid (6.4) (10.9) Portfolio free cash flow 100.4 73.8 Cash conversion %2 74% 65% Net payment of inter
Slide 30: Reconciliation of Adjusted EBITDA to loss before tax
Reconciliation of Adjusted EBITDA to loss before tax 6 months ended 30 June US$m 2022 2021 Adjusted EBITDA 136.1 114.2 Adjustments applied in arriving at Adjusted EBITDA: Adjusting items: Deal costs1 (6.9) (8.8) Share-based payments and long-term incentive plans2 (1.2) (0.7) Gain/(loss) on disposals
Slide 31: ROIC breakdown
ROIC breakdown US$m 2016 2017 2018 2019 2020 2021 H1 22 Property, plant and equipment 655.1 705.7 676.6 631.9 594.7 718.7 750.1 Accumulated depreciation 272.5 383.0 490.6 597.2 713.0 833.3 892.0 Less: Accumulated maintenance and corporate capital expenditure (113.2) (135.4) (151.8) (163.9) (180.6) (
Slide 32: 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