REG - Helios Towers PLC - Q3 2022 Results
03/11/2022 07:00
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RNS Number : 1437F Helios Towers PLC 03 November 2022
HELIOS TOWERS plc
Unaudited trading update for the nine months and quarter ended 30 September
2022
+18% year-on-year Adjusted EBITDA growth
Oman closing nearing completion with towerco license received
2022 organic tenancy guidance tightened upwards to 1,400 - 1,700
London, 3 November 2022: Helios Towers plc ("Helios Towers", "the Group" or
"the Company"), the independent telecommunications infrastructure company,
today announces results for the nine months to 30 September 2022 ("YTD 2022").
YTD 2022 YTD 2021 Change Q3 2022 Q2 2022 Change
Sites 10,872 8,765 +24% 10,872 10,694 +2%
Tenancies 20,913 17,773 +18% 20,913 20,549 +2%
Tenancy ratio 1.92x 2.03x -0.11x 1.92x 1.92x 0.00x
Revenue (US$m) 408.8 326.8 +25% 143.4 137.9 +4%
Adjusted EBITDA (US$m)1 206.8 175.0 +18% 70.7 69.4 +2%
Adjusted EBITDA margin1 51% 54% -3ppt 49% 50% -1ppt
Operating profit (US$m) 62.9 42.0 +50% 23.1 25.4 -9%
Portfolio free cash flow (US$m)1 145.1 118.7 +22% 44.7 51.0 -12%
Cash generated from operations (US$m) 161.7 98.6 +64% 70.7 38.5 +84%
Net debt (US$m)(1) 1,148.1 835.9 +37% 1,148.1 1,082.4 +6%
Net leverage(1,2) 4.1x 3.4x +0.7x 4.1x 3.9x +0.2x
(1) Alternative Performance Measures are described in our defined terms
and conventions.
(2) Calculated as per the Senior Notes definition of net debt divided by
annualised Adjusted EBITDA.
Tom Greenwood, Chief Executive Officer, said:
"I am pleased to report another quarter of strong operational and financial
performance, which highlights our focus on customer service excellence and the
structural growth opportunity across the region, underpinned by a highly
visible base of contracted revenues. Looking ahead, we are pleased to update
our organic tenancy guidance for the year, reflecting performance year-to-date
and our robust commercial pipeline. Coupled with our ongoing transformational
platform expansion, which includes our targeted entry into Oman in Q4 22, we
expect to enter 2023 in a strong position for continued growth."
Financial highlights
· YTD 2022 revenue increased by 25% year-on-year to US$408.8m (YTD
2021: US$326.8m), driven by acquisitions in Senegal, Madagascar and Malawi and
strong organic tenancy growth across the Group, in addition to CPI and power
price escalations. Organic revenues, excluding acquisitions, increased 14%
year-on-year.
o Q3 2022 revenue increased by 4% quarter-on-quarter to US$143.4m (Q2 2022:
US$137.9m).
· YTD 2022 Adjusted EBITDA increased by 18% year-on-year to
US$206.8m (YTD 2021: US$175.0m), driven by tenancy growth (18%), with YTD 2022
Adjusted EBITDA margin decreasing 3ppt year-on-year to 51% (YTD 2021: 54%),
reflecting the impact of acquired assets with low initial tenancy ratios and
higher power costs across the Group, most notably in DRC, resulting in both
higher revenues and power operating expenses.
o The Group's Adjusted EBITDA is effectively protected from power price
movements through power and CPI escalators embedded into customer contracts,
although Adjusted EBITDA margin can decrease in a period of rising power
prices as both power-linked revenues and related operating expenses increase
comparably.
o Q3 2022 Adjusted EBITDA increased by 2% quarter-on-quarter to US$70.7m (Q2
2022: US$69.4m), with Q3 2022 Adjusted EBITDA margin at 49% (Q2 2022: 50%).
· YTD 2022 operating profit increased by 50% year-on-year to
US$62.9m (YTD 2021: US$42.0m) due to growth in Adjusted EBITDA, partially
offset by higher depreciation.
o Q3 2022 operating profit decreased by 9% quarter-on-quarter to US$23.1m
(Q2 2022: US$25.4m), due to higher depreciation during the period.
· YTD 2022 portfolio free cash flow increased by 22% year-on-year
to US$145.1m (YTD 2021: US$118.7m), driven by Adjusted EBITDA growth and
timing of non-discretionary capex additions.
o Q3 2022 portfolio free cash flow decreased by 12% quarter-on-quarter to
US$44.7m (Q2 2022: US$51.0m), reflecting the timing of tax and lease liability
payments.
· YTD 2022 cash generated from operations increased by 64%
year-on-year to US$161.7m (YTD 2021: US$98.6m), driven by higher Adjusted
EBITDA, a decrease in deal costs and a one-off escrow deposit payment in
relation to the Oman transaction in 2021 which did not occur in 2022.
o Q3 2022 cash generated from operations increased by 84% quarter-on-quarter
to US$70.7m (Q2 2022: US$38.5m), primarily due to an improved working capital
position.
· Net leverage of 4.1x increased by +0.7x year-on-year (Q3 2021:
3.4x), primarily due to acquisitions in Madagascar and Malawi, and +0.2x
quarter-on-quarter (Q2 2022: 3.9x), remaining within the Group's medium-term
target range of 3.5x-4.5x.
o Following closure of announced acquisitions, the Group's net leverage is
anticipated to be around the high-end of its medium-term target range.
o Strong balance sheet with 96% of drawn debt at a fixed rate, no near-term
maturities and fully-funded for announced transactions.
· Business underpinned by long-term contracted revenues of US$4.0bn
(Q3 2021: US$3.7bn), of which 99% is from multinational MNOs, with an average
remaining life of 7.0 years (Q3 2021: 7.6 years).
o Pro forma for the announced transaction in Oman and potential acquisition
in Gabon, the Group has contracted revenues of US$5.1bn.
o CPI and power price escalators embedded into customer contracts provides
an effective hedge against inflation and power price movements over a
full-year cycle.
Operational highlights
· Sites increased by 2,107 year-on-year to 10,872 sites (Q3 2021:
8,765 sites), reflecting 894 organic site additions and the acquisition of
1,213 sites in Malawi and Madagascar.
o Sites increased organically by 178 quarter-on-quarter.
· Tenancies increased by 3,140 year-on-year to 20,913 tenants (Q3
2021: 17,773 tenants), reflecting 1,448 organic tenancy additions and 1,692
additional tenancies through the acquisitions in Madagascar and Malawi.
o Tenancies increased organically by 364 quarter-on-quarter.
· Tenancy ratio decreased 0.11x year-on-year to 1.92x (Q3 2021:
2.03x), reflecting the dilutive impact of the acquired assets from Madagascar
and Malawi (Tenancy ratio - Madagascar Q3 22: 1.20x, Malawi Q3 22: 1.59x),
which the Group targets to increase over the medium-term as these acquired
assets are leased-up.
Strategic Updates
· The Group continues to progress with the closing of Omantel's
passive infrastructure assets, with Helios Towers Oman receiving its towerco
licence in October 2022, and today reiterates its expectation of closing the
transaction in Q4 2022.
· The Group also continues to engage on obtaining a local towerco
license in Gabon in relation to the potential acquisition of Airtel Africa's
tower assets. However, timing remains uncertain following continued delays in
the licence process.
Environmental, Social and Governance (ESG)
· In October 2022, Helios Towers South Africa attained level 1
B-BBEE certification, reflecting the Company's commitment to a high level of
corporate and social investment into the communities in which it operates.
· As previously reported, Helios Towers was awarded a 'AAA' ESG
score from MSCI in H1 2022, the highest score from the investment research
firm, in addition to being included in the FTSE4Good Index, a series designed
to measure the performance of companies demonstrating strong ESG practices.
2022 Outlook and guidance
· Following strong operational performance and coupled with a
robust commercial pipeline, the Group has tightened upwards its FY 2022
organic tenancy guidance to 1,400 - 1,700 (prior: 1,200 - 1,700), of which 60%
are expected to be sites.
· As a result of higher power prices expected in FY 2022, which
increase both power-linked revenues and related operating expenses comparably,
the Group has updated its Adjusted EBITDA margin guidance to 50 - 51% (prior:
51 - 53%)
· In-line with the updated organic tenancy guidance the Group has
tightened its FY 2022 target capex range to US$830m - US$850m in FY 2022
(prior: US$810m - US$850m)
o Year-to-date, the Group has deployed capex of US$214m, including US$63m of
acquisition capex principally related to the acquisition in Malawi.
o Excluding acquisitions, the Group anticipates US$180m - US$200m of capex,
of which, US$27m - US$32m is non-discretionary capex.
o The Group anticipates acquisition capex of approximately US$650m in 2022,
reflecting the acquisitions in Oman and Malawi, and deferred acquisition
payments in Senegal and Madagascar.
For further information go to:
www.heliostowers.com (http://www.heliostowers.com)
Investor Relations
Chris Baker-Sams - Head of Strategic Finance and Investor Relations
+44 (0)752 310 1475
Media relations
Edward Bridges / Stephanie Ellis
FTI Consulting LLP
+44 (0)20 3727 1000
Helios Towers' management will host a conference call for analysts and
institutional investors at 09.30 GMT on Thursday, 3 November 2022. For the
best user experience, please access the conference via the webcast. You can
pre-register and access the event using the link below:
Registration Link - Helios Towers Q3 2022 Results Conference Call
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Event Name: Q32022
Password: HELIOS
If you are unable to use the webcast for the event, or if you intend to
participate in Q&A during the call, please dial in using the details
below:
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Passcode: 863641
About Helios Towers
· Helios Towers is a leading independent telecommunications
infrastructure company, having established one of the most extensive tower
portfolios across Africa. It builds, owns and operates telecom passive
infrastructure, providing services to mobile network operators.
· Helios Towers owns and operates telecommunication tower sites in
Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana, South
Africa, Senegal, Madagascar and Malawi. Following recent acquisition
agreements and subject to regulatory approval, Helios Towers expects to
establish a presence in two new markets across the Middle-East and Africa.
Including these acquisitions and committed BTS, the Group's total site count
is expected to increase from over 10,500 towers to over 14,000.
· 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.
Alternative Performance Measures
The Group has presented a number of Alternative Performance Measures ("APMs"),
which are used in addition to IFRS statutory performance measures. The Group
believes that these APMs, which are not considered to be a substitute for or
superior to IFRS measures, provide stakeholders with additional helpful
information on the performance of the business. These APMs are consistent with
how the business performance is planned and reported within the internal
management reporting to the Board. Loss before tax, gross profit, non-current
and current loans and long-term and short-term lease liabilities are the
equivalent statutory measures (see 'Certain defined terms and conventions').
For more information on the Group's Alternative Performance Measures, see the
Group's Annual report for the year ended 31 December 2021, published on the
Group's website. Reconciliations of APMs to the equivalent statutory measure
are included in the Group's Half-Year and Annual financial reports.
Financial and operating metrics
Key metrics
For the nine months ended 30 September
Group Tanzania DRC Congo Brazzaville Ghana South Africa
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m US$m
Revenue for the period $408.8 $326.8 $147.7 $126.7 $150.1 $128.8 $21.1 $20.9 $29.8 $31.9 $6.6 $4.4
Adjusted gross margin1 64% 67% 70% 69% 58% 65% 65% 65% 67% 69% 73% 73%
Sites at beginning of the period 9,560 7,356 4,005 3,821 2,062 1,895 459 426 1,040 978 272 236
Sites at period end 10,872 8,765 4,174 3,880 2,186 1,973 502 432 1,109 1,019 362 253
Tenancies at beginning of the period 18,776 15,656 9,012 8,625 4,701 4,096 661 617 2,041 1,914 464 404
Tenancies at period end 20,913 17,773 9,312 8,853 4,927 4,584 699 632 2,210 1,991 606 436
Tenancy ratio at period end 1.92x 2.03x 2.23x 2.28x 2.25x 2.32x 1.39x 1.46x 1.99x 1.95x 1.67x 1.72x
Adjusted EBITDA for the period2 $206.8 $175.0 $98.4 $83.8 $77.2 $74.4 $10.0 $9.9 $17.2 $19.1 $3.0 $1.8
Adjusted EBITDA Margin(2) for the period 51% 54% 67% 66% 51% 58% 47% 47% 58% 60% 45% 41%
Senegal(3) Madagascar(4) Malawi(5)
2022 2021 2022 2021 2022 2021
US$m US$m US$m US$m US$m US$m
Revenue for the period $27.4 $14.1 $11.3 - $14.8 -
Adjusted gross margin1 70% 62% 51% - 42% -
Sites at beginning of the period 1,232 - 490 - - -
Sites at period end 1,303 1,208 489 - 747 -
Tenancies at beginning of the period 1,303 - 594 - - -
Tenancies at period end 1,388 1,277 586 - 1,185 -
Tenancy ratio at period end 1.07x 1.06x 1.20x - 1.59x -
Adjusted EBITDA for the period2 $16.3 $7.2 $4.1 - $4.6 -
Adjusted EBITDA Margin(2) for the period 59% 51% 36% - 31% -
(1) Adjusted gross margin means gross profit, adding back site
depreciation, divided by revenue.
(2) Group Adjusted EBITDA for the period is stated including
corporate costs of US$23.9m (2021: US$21.2m).
(3 ) Results for the period from completion on 18(th) May
2021
(4 ) Results for the period since acquisition on 2(nd)
November 2021
(5 ) Results for the period since acquisition on 24(th)
March 2022.
Total tenancies as at 30 September
Group Tanzania DRC Congo Brazzaville Ghana South Africa
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Standard colocation tenants 8,850 8,081 4,488 4,416 2,583 2,509 169 177 762 733 233 178
Amendment colocation tenants 1,191 927 650 557 158 102 28 23 339 239 11 5
Total colocation tenants 10,041 9,008 5,138 4,973 2,741 2,611 197 200 1,101 972 244 183
Total sites 10,872 8,765 4,174 3,880 2,186 1,973 502 432 1,109 1,019 362 253
Total tenancies 20,913 17,773 9,312 8,853 4,927 4,584 699 632 2,210 1,991 606 436
Senegal Madagascar Malawi
2022 2021 2022 2021 2022 2021
Standard colocation tenants 84 68 93 - 438 -
Amendment colocation tenants 1 1 4 - - -
Total colocation tenants 85 69 97 - 438 -
Total sites 1,303 1,208 489 - 747 -
Total tenancies 1,388 1,277 586 - 1,185 -
Revenue
Revenue increased by 25% to US$408.8m in the 9 month period ended 30 September
2022 from US$326.8m in the period ended 30 September 2021, US$39.4m from
acquisitions in Senegal, Madagascar and Malawi and US$42.6m due to organic
growth and escalations in our existing markets. For the period ended 30
September 2022, 98% of revenues were from multinational MNOs and 62% were
denominated in USD or CFA Franc (which is pegged to the Euro).
Adjusted EBITDA
Adjusted EBITDA was US$206.8m in the 9 month period ended 30 September 2022
compared to US$175.0m in the 9 month period ended 30 September 2021. The
increase in Adjusted EBITDA is primarily driven by the integration of
operations in Senegal, Madagascar and Malawi, contributing US$17.8m, and
organic growth as mentioned above.
Adjusted EBITDA margin declined 3ppt in the 9 month period ended 30 September
2022, reflecting the impact of acquired assets with low initial tenancy
ratios, higher power costs across the Group, most notably in DRC, which due to
escalators in our customer contracts increases revenues comparably to
operating expenses over a full-year cycle and therefore reduces Adjusted
EBITDA margin.
Contracted revenue
The following table provides our total undiscounted contracted revenue by
country as of 30 September 2022 for each of the periods from 2022 to 2026,
with local currency amounts converted at the applicable average rate for US
Dollars for the period ended 30 September 2022 held constant. Our contracted
revenue calculation for each year presented assumes: (i) no escalation in fee
rates, (ii) no increases in sites or tenancies other than our committed
tenancies, (iii) our customers do not utilise any cancellation allowances set
forth in their MLAs, (iv) our customers do not terminate MLAs early for any
reason and (v) no automatic renewal.
Year ended 31 December
3 months to 2023 2024 2025 2026
31 December 2022
US$m US$m US$m US$m US$m
Tanzania 49.8 204.8 204.8 204.9 140.7
DRC 49.7 211.1 210.7 182.0 154.4
Congo Brazzaville 7.0 28.4 28.4 19.1 12.4
Ghana 7.6 29.5 27.1 27.4 27.2
South Africa 1.9 8.2 8.2 8.0 7.8
Senegal 8.9 35.5 36.9 38.6 43.2
Madagascar 4.3 12.0 12.6 15.5 15.5
Malawi 4.4 17.6 17.6 18.8 18.8
133.6 547.1 546.3 514.3 420.0
The following table provides our total undiscounted contracted revenue by key
customers as of 30 September 2022 over the life of the contracts with local
currency amounts converted at the applicable average rate for US Dollars for
the period ended 30 September 2022 held constant. Our calculation uses the
same assumptions as above. The average remaining life of customer contracts is
7.0 years (Q3 2021: 7.6 years).
(US$m) Total Committed Revenues Percentage of Total Committed Revenues
Multinational MNOs 3,986.8 99%
Others 54.7 1%
4,041.5 100%
Portfolio free cash flow
Portfolio free cash flow increased by 22% year-on-year to US$145.1m (YTD 2021:
US$118.7m), driven by an increase in EBITDA, lower maintenance and corporate
capital expenditure, partially offset by higher lease and tax payments.
9 months ended 30 September
2022 2021
US$m US$m
Adjusted EBITDA 206.8 175.0
Less: Maintenance and corporate capital additions (14.7) (19.6)
Less: Payments of lease liabilities1 (31.8) (22.4)
Less: Tax paid2 (15.2) (14.3)
Portfolio free cash flow 145.1 118.7
Cash conversion %(3) 70% 68%
(1) Includes interest and principal repayments of lease liabilities.
(2) Tax paid in the 9 months ended 30 September 2021 excludes amounts paid
in relation to Change of Control Taxes.
(3) Cash conversion % is calculated as portfolio free cash flow divided by
Adjusted EBITDA.
Capital expenditure
The following table shows capital expenditure additions by category during the
nine months ended 30 September:
2022 2021
US$m % of US$m % of
Total Capex Total Capex
Acquisition 62.5 29.2% 181.9 66.9%
Growth 120.2 56.0% 60.7 22.3%
Upgrade 17.0 7.9% 9.7 3.6%
Maintenance 13.4 6.3% 18.0 6.6%
Corporate 1.3 0.6% 1.6 0.6%
214.4 100.0% 271.9 100.0%
Acquisition capex in the nine months ended 30 September 2022 relates primarily
to Malawi and deferred consideration payments for Senegal, excluding the fair
value of assets and liabilities acquired and goodwill recognised under IFRS 3.
Certain defined terms and conventions
We have prepared the trading update using a number of conventions, which you
should consider when reading information contained herein as follows:
All references to "we", "us", "our", "HT Group", our "Group" and the "Group"
are references to Helios Towers plc and its subsidiaries taken as a whole.
We have prepared the interim report using a number of conventions, which you
should consider when reading information contained herein as follows:
All references to 'we', 'us', 'our', 'HT Group', 'Helios Towers' our 'Group'
and the 'Group' are references to Helios Towers, plc and its subsidiaries,
taken as a whole.
'2G' means the second-generation cellular telecommunications network
commercially launched on the GSM and CDMA standards.
'3G' means the third-generation cellular telecommunications networks that
allow simultaneous use of voice and data services, and provide high-speed data
access using a range of technologies.
'4G' means the fourth-generation cellular telecommunications networks that
allow simultaneous use of voice and data services, and provide high-speed data
access using a range of technologies (these speeds exceed those available for
3G).
'5G' means the fifth generation cellular telecommunications networks. 5G does
not currently have a publicly agreed upon standard; however, it provides
high-speed data access using a range of technologies that exceed those
available for 4G.
'Adjusted EBITDA' is defined by management as loss before tax for the year,
adjusted for finance costs, other gains and losses, interest receivable, loss
on disposal of property, plant and equipment, amortisation of intangible
assets, depreciation and impairments 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.
'Adjusted EBITDA margin' means Adjusted EBITDA divided by revenue.
'Adjusted free cash flow' means portfolio free cash flow less net payment of
interest and discretionary capital additions.
'Adjusted gross margin' means Adjusted Gross Profit, divided by revenue.
'Adjusted gross profit' means gross profit adding back site and warehouse
depreciation.
'Airtel' means Airtel Africa.
'ALU' means average lease-up, the number of colocation tenancies added to our
portfolio in a defined period of time divided by the average number of total
sites for the same period of time, excluding colocations acquired as part of
site acquisitions reported as of a certain date.
'amendment colocation tenant' means tenants that add or modify equipment,
taking up additional space, wind load capacity and/or power consumption under
an existing lease agreement. The Group calculates amendment colocations on a
weighted basis as compared to the market average rate for a standard tenancy
in the month the amendment is added.
'amendment revenue' means revenue from amendments to existing site contracts
when tenants add or modify equipment, taking up additional vertical space,
wind load capacity and/or power consumption under an existing site contract.
'anchor tenant' means the primary customer occupying each site.
'Analysys Mason' means Analysys Mason Limited.
'Announced markets/Announced new markets': Announced markets reflects signed
acquisition agreements with Omantel for tower portfolios in Oman, in addition
to a memorandum of understanding arrangement for the potential acquisition of
Airtel Africa's tower portfolio in Gabon. All are subject to completion.
'Annualised Adjusted EBITDA' means Adjusted EBITDA for the last three months
of the respective period, multiplied by four, adjusted to reflect the
annualised contribution from acquisitions that have closed in the last three
months of the respective period.
'Annualised portfolio free cash flow' means portfolio free cash flow for the
respective period, adjusted to annualise for the impact of acquisitions closed
during the period.
'average remaining life' means the average of the periods through the
expiration of the term under certain agreements.
'APMs' Alternative Performance Measures are measures of financial performance,
financial position or cash flows that are not defined or specified under IFRS
but used by the Directors internally to assess the performance of the Group.
'Axian' means Axian Group.
'build-to-suit/BTS' means sites constructed by our Group on order by a MNO.
'CAGR' means compound annual growth rate.
'Carbon Reduction Roadmap' refers to Carbon Reduction Roadmap 2021 presented
by Helios Towers, Plc on 25th November 2021.
'CODM' means Chief Operating Decision Maker.
'colocation' means the sharing of site space by multiple customers or
technologies on the same site, equal to the sum of standard colocation tenants
and amendment colocation tenants.
'colocation tenant' means each additional tenant on a site in addition to the
primary anchor tenant and is classified as either a standard or amendment
colocation tenant.
'committed colocation' means contractual commitments relating to prospective
colocation tenancies with customers.
'Company' means Helios Towers, Ltd prior to 17 October 2019, and Helios Towers
plc on or after 17 October 2019.
'Congo Brazzaville' otherwise also known as the Republic of Congo.
'contracted revenue' means total undiscounted revenue as at that date with
local currency amounts converted at the applicable average rate for US dollars
held constant. Our contracted revenue calculation for each year presented
assumes: (i) no escalation in fee rates, (ii) no increases in sites or
tenancies other than our committed tenancies (which include committed
colocations and/or committed anchor tenancies), (iii) our customers do not
utilise any cancellation allowances set forth in their MLAs (iv) our customers
do not terminate MLAs early for any reason and (v) no automatic renewal.
'corporate capital expenditure' primarily relates to furniture, fixtures and
equipment.
'DRC' means Democratic Republic of Congo.
'edge data centre' means secure temperature-controlled technical facilities
which are smaller than a standard core network data centre and positioned on
the edge of a telecommunications network. They are used by operators to
regenerate fibre signal, deliver cloud computing resources or cache streaming
content for local users.
'Free Cash Flow' means Adjusted free cash flow less net change in working
capital, cash paid for adjusting and EBITDA adjusting items, cash paid in
relation to non-recurring taxes and proceeds on disposal of assets.
'Free Senegal' means Saga Africa Holdings Limited SA (which operates under the
'Free' trademark).
'Free Senegal MTSA' means the MTSA with Free Senegal for the provision of
hosting and energy services on the acquired sites and build-to-suit sites.
'Free Senegal site acquisition' means the acquisition of 1,207 sites in
Senegal from Free Senegal and the entry into the Free Senegal MTSA.
'Gabon' means Gabonese Republic.
'Ghana' means the Republic of Ghana.
'gross debt' means non-current loans and current loans and long-term and
short-term lease liabilities.
'gross leverage' means gross debt divided by annualised Adjusted EBITDA.
'gross margin' means gross profit, adding site and warehouse depreciation,
divided by revenue.
'growth capex' or 'growth capital expenditure' relates to (i) construction of
build-to-suit sites (ii) installation of colocation tenants and (ii) and
investments in power management solutions.
'GSM' means Global System for Mobile Communication, a standard for digital
mobile communications.
'Group' means Helios Towers, Ltd ('HTL') and its subsidiaries prior to 17
October 2019, and Helios Towers plc and its subsidiaries on or after 17
October 2019.
'Helios Towers Congo Brazzaville' or 'HT Congo Brazzaville' means Helios
Towers Congo Brazzaville SASU.
'Helios Towers DRC' or 'HT DRC' means HT DRC Infraco SARL.
'Helios Towers Ghana' or 'HT Ghana' means HTG Managed Services Limited.
'Helios Towers plc' means the ultimate Company of the Group.
'Helios Towers South Africa' or 'HTSA' means Helios Towers South Africa
Holdings (Pty) Ltd and its subsidiaries.
'Helios Towers Tanzania' or 'HT Tanzania' means HTT Infraco Limited.
'HSE' means Health, Safety and Environment.
'IBS' means in-building cellular enhancement.
'ISA' means individual site agreement.
'ISP' means Internet Service Provider.
'IFRS' means International Financial Reporting Standards as adopted by the
European Union.
'independent tower company' means a tower company that is not affiliated with
a telecommunications operator.
'lease-up' means the addition of colocation tenancies to our sites.
'Levered portfolio free cash flow' means portfolio free cash flow less net
payment of interest.
'liquidated damages' means provisions that generally require the Group to make
a payment to the customer, most often by means of set-off against service fees
payable by the customer, if the Group fails to uphold a specified level of
uptime.
'Madagascar' means Republic of Madagascar.
'Malawi' means Republic of Malawi.
'maintenance capital expenditure' means capital expenditures for periodic
refurbishments and replacement of parts and equipment to keep existing sites
in service.
'maintained sites' means sites that are maintained by the Group on behalf of a
telecommunications operator but which are not marketed by the Group to other
telecommunications operators for colocation (and in respect of which the
Company has no right to market).
'managed sites' means sites that the Group currently manages but does not own
due to either: (i) certain conditions for transfer under the relevant
acquisition documentation, ground lease and/or law not yet being satisfied; or
(ii) the site being subject to an agreement with the relevant MNO under which
the MNO retains ownership and outsources management and marketing to the
Company.
'Mauritius' means the Republic of Mauritius.
'Middle East' region includes thirteen countries namely Hashemite Kingdom of
Jordan, Kingdom of Bahrain, Kingdom of Saudi Arabia, Republic of Iraq,
Republic of Lebanon, State of Kuwait, Sultanate of Oman, State of Palestine,
State of Qatar, Syrian Arab Republic, The Republic of Yemen, The Islamic
Republic of Iran and The United Arab Emirates.
'Millicom' means Millicom International Cellular SA.
'MLA' means master lease agreement.
'MNO' means mobile network operator.
'mobile penetration' means the amount of unique mobile phone subscriptions as
a percentage of the total market for active mobile phones.
'MTN' means MTN Group Ltd.
'MTSAs' means master tower services agreements.
'net debt' means gross debt less adjusted cash and cash equivalents.
'net leverage' means net debt divided by last quarter annualised Adjusted
EBITDA.
'net receivables' means total trade receivables (including related parties)
and accrued revenue, less deferred income.
'NOC' means network operating centre.
'Oman' means Sultanate of Oman.
'online site' means a site which is operating and generating revenue.
'Orange' means Orange S.A.
'our established markets' refers to Tanzania, DRC, Congo Brazzaville, Ghana
and South Africa.
'our markets' or 'markets in which we operate' refers to Tanzania, DRC, Congo
Brazzaville, Ghana, South Africa, Senegal, Madagascar and Malawi.
'owned sites' means freehold or leasehold sites where we own the
telecommunications passive infrastructure and any equipment relating to power
provision and security. We are responsible for maintaining and securing the
site as well as obtaining the relevant permits and, if applicable, ground
leases relating to the sites.
'performance against SLA' means with respect to a given customer, the uptime
achieved for a given period divided by the maximum required contractual
downtime in such customer's SLA, as applicable.
'Portfolio free cash flow' defined as Adjusted EBITDA less maintenance and
corporate capital additions, payments of lease liabilities (including interest
and principal repayments of lease liabilities) and tax paid.
'PoS' means points of service, which is an MNO's antennae equipment
configuration located on a site to provide signal coverage to subscribers. At
Helios Towers, a standard PoS is equivalent to one tenant on a tower.
'Principal Shareholders' means Millicom Holding B.V., Quantum Strategic
Partners, Ltd., Lath Holdings Ltd., ACM Africa Holdings, LP, RIT Capital
Partners plc, IFC African, Latin American and Caribbean Fund, LP and
International Finance Corporation.
'Senegal' means the Republic of Senegal.
'Shares' means the shares in the capital of the Company.
'Shareholders Agreement' means the agreement entered into between the
Principal Shareholders and the Company on 15 October 2019, which grants
certain governance rights to the Principal Shareholders and sets out a
mechanism for future sales of shares in the capital of the Company.
'SHEQ' means Safety, Health, Environment and Quality.
'site acquisition' means a combination of MLAs or MTSAs, which provide the
commercial terms governing the provision of site space, and individual ISA,
which act as an appendix to the relevant MLA or MTSA, and include
site-specific terms for each site.
'site agreement' means the MLA and ISA executed by us with our customers,
which act as an appendix to the relevant MLA and includes certain
site-specific information (for example, location and any grandfathered
equipment).
'SLA' means service-level agreement.
'small cells' means low-powered cellular radio access nodes that operate in
licensed and unlicensed spectrum that have a range of ten metres to a few
kilometres.
'South Africa' means the Republic of South Africa.
'standard colocation' means tower space under a standard tenancy site contract
rate and configuration with defined limits in terms of the vertical space
occupied, the wind load and power consumption.
'standard colocation tenant' means a customer occupying tower space under a
standard tenancy lease rate and configuration with defined limits in terms of
the vertical space occupied, the wind load and power consumption.
'strategic suppliers' means suppliers that deliver products or provide us
with services deemed critical to executing our strategy such as site
maintenance and batteries.
'Sub-Saharan Africa' or 'SSA' means African countries that are fully or
partially located south of the Sahara.
'Tanzania' means the United Republic of Tanzania.
'telecommunications operator' means a company licensed by the government to
provide voice and data communications services.
'tenancy' means a space leased for installation of a base transmission site
and associated antennae.
'tenancy ratio' means the total number of tenancies divided by the total
number of our sites as of a given date and represents the average number of
tenants per site within a portfolio.
'tenant' means an MNO that leases vertical space on the tower and portions of
the land underneath on which it installs its equipment.
'Tigo' refers to one or more subsidiaries of Millicom that operate under the
commercial brand 'Tigo'.
'total colocations' means standard colocations plus amendment colocations as
of a given date.
'total online sites' or 'total sites' means total towers, IBS sites, edge data
centres or sites with customer equipment installed on third-party
infrastructure that are owned and/or managed by the Company with each reported
site having at least one active customer tenancy as of a given date.
'total tenancies' means total anchor, standard and amendment colocation
tenants as of a given date.
'tower contract' means the MLA and ISA executed by us with our customers,
which act as a schedule to the relevant MLA and includes certain site-specific
information (for example, location and equipment).
'tower sites' means ground-based towers and rooftop towers and installations
constructed and owned by us on property (including a rooftop) that is
generally owned or leased by us.
'UK Corporate Governance Code' means the UK Corporate Governance Code
published by the Financial Reporting Council and dated July 2018, as amended
from time to time.
'upgrade capex' or 'upgrade capital expenditure' comprises structural,
refurbishment and consolidation activities carried out on selected acquired
sites.
'Viettel' means Viettel Tanzania Limited.
'Vodacom' means Vodacom Group Limited.
'Vodacom Tanzania' means Vodacom Tanzania plc.
'Zantel' means Zantel Telecom plc.
Disclaimer:
This release does not constitute an offering of securities or otherwise 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 (the 'Group'), nor
should it be construed as legal, tax, financial, investment or accounting
advice. This release 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
Company'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 the forward-looking statements made in this
release, 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 release 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.
This release also contains non-GAAP financial information 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.
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