Results H1 2020 13 August 2020
Helios Towers team today Tom Greenwood Kash Pandya Manjit Dhillon Chief Operating Chief Executive Interim Chief Officer Officer Financial Officer Helios Towers plc 1
Agenda 1 Highlights – Kash Pandya, CEO 2 Senegal Expansion – Tom Greenwood, COO 3 Financial Results – Manjit Dhillon, Interim CFO 4 Q&A Helios Towers plc 2
Highlights
H1 2020 highlights STRONG REVENUE +7% revenue growth from $191m in H1 19 to $204m in H1 20 GROWTH CONTINUED EBITDA +10% Adj. EBITDA growth from $99m in H1 19 to $109m in H1 20, with margin FINANCIAL expansion of +1ppt to 53% EXPANSION… …DRIVING CASH FLOW Portfolio free cash flow of $89m (1) for H1 20, a +12% increase YoY GENERATION SOLID SITE AND Site growth of +3% YoY to 7,092 and tenancy growth of +6% YoY to 14,906, resulting in a +0.05x tenancy ratio increase to 2.10x TENANCY GROWTH Signed agreement to acquire 1,220 sites from Free Senegal for upfront cash M&A STRATEGY consideration of €160m ($189m) , with 400 new sites committed over next five NEW MARKETS years for c. €70m ($82m) in deferred consideration and growth capex (2) STRATEGIC/ OPERATIONAL M&A STRATEGY Signed two bolt-on acquisitions, reflecting 80 sites in Q2 across South Africa EXISTING MARKETS and Congo B, with 19 additional sites expected later in the year Successfully completed refinancing with issuance of $750m 7% bond IMPROVED FINANCING alongside term loan of up to $200m and RCF of $70m , reducing cost of debt, STRUCTURE extending maturities and providing additional capital for expansion LEADERSHIP Tom Greenwood appointed to newly created role of Chief Operating CHANGE Officer, in order to focus on driving HT’s expansion and M&A strategy (1) Portfolio free cash flow is defined as Adj. EBITDA less payment of lease liabilities, tax paid and maintenance and corporate capital additions. (2) €70m reflects €40m in deferred consideration and c. €30m of growth capex investment. Helios Towers plc 4
H1 2020: Strong returns and consistent growth Three measures that capture the fast growth, cash generation and efficient capital allocation of our business Adj. EBITDA (1) Portfolio free cash flow (2) ROIC (3) Highlights growth and operational Measures the unlevered free cash flow Highlights asset efficiency and • • • performance of our business generation of the existing site portfolio effectiveness of our capital allocation 220 14.5% 14.4% 205 173 169 178 12.1% 54% 53% 133 146 50% 9.4% 97 105 42% 5.7% 51 37% (4) (4) (4) 2016 2017 2018 2019 2020 LQA 2016 2017 2018 2019 2020 LQA 2016 2017 2018 2019 2020 LQA LQA Adj. EBITDA of $220m, reflecting 7% growth from $205m in FY 19 and our 22 nd consecutive quarter of growth • LQA portfolio free cash flow of $173m, increasing 2% from FY 19 with Adj. EBITDA growth partially offset by higher • maintenance and corporate capex and lease liability payments ROIC stable at 14.5% reflecting portfolio free cash flow growth offset by recent acquisition and growth investments • (1) Management defines Adjusted EBITDA as loss before tax for the period, adjusted for finance costs, gain or losses on financial instruments, interest receivable, loss on disposal of property, plant and equipment, amortisation of intangible assets, depreciation and impairment of property, plant and equipment, depreciation of right-of-use assets, deal costs for aborted acquisitions, deal costs not capitalised, share-based payments and long-term incentive plan charges, and other adjusting items. Adjusting items are material items that are considered one-off by management by virtue of their size and/or incidence. 5 (2) Portfolio Free Cash Flow is defined as Adj. EBITDA less payment of lease liabilities, tax paid and maintenance and corporate capital additions. (3) ROIC is defined as portfolio free cash flow divided by Invested capital. Invested capital is defined as gross plant, property and equipment and gross intangibles, less accumulated maintenance and corporate capital expenditure. A reconciliation is available within the appendix. (4) LQA is calculated as the most recently reported fiscal quarter (Q2 20) multiplied by four.
Resilient business model demonstrates minimal impact of COVID-19 to both operations and financials Commentary Impact Assessment Change since Q1 20 Workforce & Field operations and home working • Minimal None • • Operations continues $2.8bn contracted revenues with 6.8 • Existing years average contract life remaining Revenue / and significant liquidity ( $213m cash as Minimal Increased liquidity • • Liquidity at Q2 20 and up to $290m of undrawn debt (1) ) Some customer rollout delays Strong pipeline, however majority • • Customer Implications for tenancy roll out if • Continue to expect 1k – 1.5k of rollout expected towards the • roll-out customers have supply chain delays tenancies in 2020 end of the year Supply Forward purchasing of capex and opex Minimal None • • • Chain Situation Regular Board monitoring and video • Minimal None • • management conference / cloud systems Full year guidance maintained (1) Reflects term loan facility of up to $200m, RCF of $70m and South African facilities of $20m (ZAR 351 available and a Q2 20 closing Fx rate of 17.3279). Helios Towers plc 6
Sustainable business strategy roadmap ✓ Contribution against Develop core focus of our strategy UN Sustainable Development Goals 1 Business excellence and efficiency Network access and 2 sustainable development 3 Empowered people and partnerships Underpinned by strong governance and values Q320 Develop strategic KPIs and targets Launch sustainability strategy internally and externally Q420 Sustainable business strategy presentation to stakeholders Q121 Launch Sustainable Business Report Helios Towers plc 7
Recent Developments Improved Tanzania listing Tower portfolio acquisition Operational excellence in our markets Governance requirement from Free Senegal Delivered power uptime of On August 13 announced Effective July 1 2020 the 25% On August 12 signed 99.99% in Q2 20 across our the appointment of Carole listing requirement no longer agreement to purchase markets, achieving record Wamuyu Wainaina as a includes companies who 1,220 towers from Free power uptime in June 2020. Non-Executive Director with hold “network facility Senegal with a commitment immediate effect. licences for leases of towers” of 400 BTS over the next five Demonstrates continuous (finance act 2000). years improvement ethos across Follows the appointment of the business and operational Sally Ashford as a Non- As a consequence Helios This acquisition is a resilience against COVID-19. Executive Director on June Towers Tanzania is no longer meaningful milestone against 15. required to list on the Dar es our strategic ambition and Salaam Stock Exchange. enters us into a compelling market for telecoms with its combination of a young, growing and increasingly urbanised population plus high GDP growth. (1) Tanzania subscriber movement reflects Vodacom disclosed information for the quarter ended 30 June 2020. DRC subscriber movement reflects weighted average Vodacom and Orange reported KPI information for the quarter ended 30 June 2020. Helios Towers plc 8
Senegal expansion
Summary Executing on our inorganic growth strategy with material acquisition in new market, Senegal Acquisition meets all of our investment criteria and marks significant progress against our 2025 strategic ambitions Acquisition provides further revenue diversification and increases % Group revenues in hard currency Closing expected by Q1 2021 and is expected to be immediately accretive to earnings Helios Towers plc 10
Transaction highlights In line with the Group’s stated ambition of growing through strategic acquisitions Signed agreement to acquire passive infrastructure assets from Free Senegal for an upfront cash consideration of €160m ($189m) . Represents an enterprise value of €178m TRANSACTION ($210m) including an estimated €18m ($21m) of taxes and capitalised ground leases. OVERVIEW In addition, deferred consideration and growth capex of €40m ($47m) and c.€ 30m ($35m) respectively are expected to be invested over the next 5 years in relation to the rollout of 400 committed new build-to-suit sites. The seller, Free Senegal, are the second largest operator in Senegal with growing market FREE SENEGAL share (26% in 2019) and are backed by a consortium of investors including NJJ, the OVERVIEW founder of the Iliad S.A. group Xavier Niel’s private holding company, Teyliom Group and Axian Group. SITES AND 1,220 sites expected upon closing and 400 build-to-suit sites committed to be rolled out over the next five years, with a service agreement of 15 years entered into with Free TENANCIES Senegal for our provision of hosting and energy services on these sites. Assets are expected to initially deliver run-rate revenues of €32m ($38m) and run-rate FINANCIALS Adjusted EBITDA of €16m ($19m). FINANCING Intend to finance transaction with cash on balance sheet and existing debt facilities. Expect to close by Q1 2021, subject to customary completion conditions and regulatory CLOSING approval with a 100 day set-up plan in motion. Assumes EUR / USD rate of 1.18. Helios Towers plc 11
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