REG - Helios Towers PLC - Q3 2023 Results

Helios TowersAnnouncement

02/11/2023 07:16

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RNS Number : 1163S  Helios Towers PLC  02 November 2023

HELIOS TOWERS plc

 

Unaudited trading update for the nine months and quarter ended 30 September
2023

 

+2,132 tenancy additions year-to-date

 

+30% year-on-year Adjusted EBITDA growth

 

Net leverage reduced to 4.5x, ahead of plan

 

FY 2023 guidance increased across all metrics

 

London, 2 November 2023: 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 2023 ("YTD 2023").

 

                                        YTD 2023  YTD 2022  Change  Q3 2023  Q2 2023  Change
 Sites                                  14,024    10,872    +29%    14,024   13,870   +1%
 Tenancies                              26,624    20,913    +27%    26,624   25,883   +3%
 Tenancy ratio                          1.90x     1.92x     -0.02x  1.90x    1.87x    +0.03x
 Revenue (US$m)                         533.7     408.8     +31%    183.5    179.4    +2%
 Adjusted EBITDA (US$m)(1)              269.2     206.8     +30%    95.4     89.1     +7%
 Adjusted EBITDA margin(1)              50%       51%       -1ppt   52%      50%      +2ppt
 Operating profit (US$m)                112.6     62.9      +79%    43.3     36.3     +19%
 Portfolio free cash flow (US$m)(1)     197.1     145.1     +36%    72.6     66.8     +9%
 Cash generated from operations (US$m)  239.7     161.7     +48%    92.1     111.4    -17%
 Net debt (US$m)(1)                     1,729.9   1,148.1   +51%    1,729.9  1,714.9  +1%
 Net leverage(1,2)                      4.5x      4.1x      +0.4x   4.5x     4.8x     -0.3x

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 strong quarter of performance, with record
year-to-date tenancy additions and accelerating organic Adj. EBITDA growth.
Accordingly, we have further increased our FY 2023 guidance, and are on track
to deliver one of our best ever years of organic growth. Alongside the
positive operational performance, we also strengthened our balance sheet
through reducing net leverage down within our target range, ahead of plan, and
opportunistically extended our average debt maturities with a minimal increase
in cost of debt.

 

The momentum from FY 2023 is expected to continue into FY 2024, supporting
continued tenancy ratio expansion, double-digit organic Adj. EBITDA growth and
further reducing net leverage to below 4.0x."

 

Financial highlights

Strong financial performance driven by tenancy growth, underpinned by a
growing base of contracted revenues that feature CPI and power price
protections

 

·     YTD 2023 revenue increased by 31% year-on-year to US$533.7m (YTD
2022: US$408.8m), driven by record organic tenancy growth across the Group and
complimented by acquisitions in Malawi and Oman.

o  Q3 2023 revenue increased by 2% quarter-on-quarter to US$183.5m (Q2 2023:
US$179.4m).

 

·     YTD 2023 Adjusted EBITDA increased by 30% year-on-year to US$269.2m
(YTD 2022: US$206.8m), driven by tenancy growth.

o  Excluding acquisitions, Adjusted EBITDA increased by 16% year-on-year.

o  Q3 2023 Adjusted EBITDA increased by 7% quarter-on-quarter to US$95.4m (Q2
2023: US$89.1m).

 

·     YTD 2023 Adjusted EBITDA margin decreased 1ppt year-on-year to 50%
(YTD 2022: 51%).

o  Excluding the impact of higher fuel prices, which increases revenue and
Adjusted EBITDA comparably, Adjusted EBITDA margin expanded 2ppt year-on-year.
 

o  Q3 2023 Adjusted EBITDA margin increased 2ppt quarter-on-quarter, driven
by strong quarterly tenancy additions.

 

·     YTD 2023 operating profit increased by 79% year-on-year to US$112.6m
(YTD 2022: US$62.9m) driven by growth in Adjusted EBITDA and a minimal
increase in depreciation.

o  Q3 2023 operating profit increased by 19% quarter-on-quarter to US$43.3m
(Q2 2023: US$36.3m).

 

·     YTD 2023 portfolio free cash flow increased by 36% year-on-year to
US$197.1m (YTD 2022: US$145.1m), driven by Adjusted EBITDA growth and improved
cash conversion.

o  Q3 2023 portfolio free cash flow increased by 9% quarter-on-quarter to
US$72.6m (Q2 2023: US$66.8m), largely driven by Adjusted EBITDA growth.

 

·      YTD 2023 cash generated from operations increased by 48%
year-on-year to US$239.7m (YTD 2022: US$161.7m), driven by higher Adjusted
EBITDA, improved working capital and a decrease in deal costs.

o  Cash generated from operations decreased by 17% quarter-on-quarter to
US$92.1m (Q2 2023: US$111.4m), driven by working capital, following strong
customer collections in Q2 2023.

 

·     Net leverage decreased by 0.6x year-to-date (Q4 2022: 5.1x) and by
0.3x quarter-on-quarter (Q2 2023: 4.8x) to reach 4.5x, within the Group's
medium-term target range of 3.5x- 4.5x.

 

·     Business underpinned by future contracted revenues of US$5.5bn (H1
2023: US$4.9bn), of which 99% is from multinational MNOs, with an average
remaining life of 7.8 years (Q3 2022: 7.0 years).

o  Contracted revenue increased by US$0.6bn quarter-on-quarter, reflecting
tenancy additions and a 10-year contract extension with a key customer,
covering approximately 2,300 tenancies.

 

Operational highlights

Consistent and strong tenancy growth reflecting leadership positions in
structurally high-growth markets

 

·     Sites increased by 3,152 year-on-year to 14,024 sites (Q3 2022:
10,872 sites), reflecting 633 organic site additions and the acquisition of
2,519 sites in Oman.

o  Sites increased organically by 154 quarter-on-quarter and 471
year-to-date.

 

·     Tenancies increased by 5,711 year-on-year to 26,624 tenants (Q3 2022:
20,913 tenants), reflecting 2,694 organic tenancy additions and 3,017
tenancies through the acquisition in Oman.

o  Tenancies increased organically by 741 quarter-on-quarter and 2,132
year-to-date.

 

·     Quarter-on-quarter tenancy ratio increased to 1.90x (Q2 2023: 1.87x),
reflecting expansion across the majority of Helios Towers' markets.

 

2023 Outlook and guidance(1)

 

·     The Group has increased its FY 2023 guidance on key metrics,
reflecting strong year-to-date performance:

 

o  Tenancy additions of 2,200 - 2,400 (prior: 1,900 - 2,100).

o  Adjusted EBITDA of US$365m - US$370m (prior: US$355m - US$365m).

o  Portfolio free cash flow of US$260m - US$265m (prior: US$235m - US$245m).

o  Capital expenditure of US$190m - US$220m (prior: US$180m - US$210m).

§ Increase reflects updated tenancy guidance (+300 tenancies).

§ Non-discretionary capital expenditure unchanged at US$40m.

 

1          Guidance assumes the Group continue to apply the same
accounting policies.

 

 

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)782 511 2288

 

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,

2 November 2023. 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 2023 Results Conference Call (https://www.investis-live.com/heliostowers/651bf95736cc9414004f6564/asdd)

Event Name: Q32023

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:

 

 Europe & International      +44 204 587 0498
 South Africa (local)        087 550 8441
 USA (local)                 +1 646 787 9445
 Passcode:                   894058

 

 

About Helios Towers

 

·     Helios Towers is a leading independent telecommunications
infrastructure company, having established one of the most extensive tower
portfolios across Africa and the Middle East. It builds, owns and operates
telecom passive infrastructure, providing services to mobile network
operators.

 

·     Helios Towers owns and operates over 14,000 telecommunication tower
sites in nine countries across Africa and the Middle East.

 

·     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.

 

Upcoming Conferences and Events
 
Helios Towers management is expected to participate in the upcoming conference outlined below:
 
·      Morgan Stanley European Technology, Media & Telecom Conference (Barcelona) - 15 to 16 November 2023

 

 

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 2022, 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                Middle East & North Africa(3)               East & West Africa(4)                 Central & Southern Africa(5)
                                           2023    2022         2023               2022                     2023       2022                       2023               2022
                                           US$m    US$m         US$m               US$m                     US$m       US$m                       US$m               US$m

 Sites at period end                       14,024  10,872  2,528                   -                  6,411            6,224      5,085                              4,648
 Tenancies at period end                   26,624  20,913  3,304                   -                  12,555           11,885     10,765                             9,028
 Tenancy ratio at period end               1.90x   1.92x   1.31x                   -                  1.96x            1.91       2.12x                              1.94
 Revenue for the period                    533.7   408.8   41.4                    -                  234.0            189.9      258.3                              218.9
 Adjusted gross margin(1)                  63%     64%     76%                     -                  68%              68%        55%                                60%
 Adjusted EBITDA for the period            269.2   206.8   27.5                    -                  147.2            119.3      120.7                              111.4
 Adjusted EBITDA Margin(2) for the period  50%     51%     66%                     -                  63%              63%        47%                                51%

1 Adjusted gross margin means gross profit, adding back site depreciation,
divided by revenue.

2 Group Adjusted EBITDA for the period includes corporate costs of US$26.2
million (2022: US$23.9 million).

3 Middle East & North Africa segment reflects the Company's operations in
Oman.

4 East & West Africa segment reflects the Company's operations in
Tanzania, Senegal and Malawi.

5 Central & Southern Africa segment reflects the Company's operations in
DRC, Congo Brazzaville, South Africa, Ghana and Madagascar.

 

 

Total tenancies as at 30 September

 

                                                   Middle East & North Africa                                  East & West Africa
                               Group               Oman                                      Tanzania          Senegal                            Malawi
                               2023    2022        2023                      2022            2023   2022       2023      2022                     2023  2022
 Standard colocation tenants   10,776  8,850       701          -                            4,658  4,488  96                      84        524        438
 Amendment colocation tenants  1,824   1,191       75           -                            802    650    30                      1         34         -
 Total colocation tenants      12,600  10,041      776          -                            5,460  5,138  126                     85        558        438
 Total sites                   14,024  10,872      2,528        -                            4,188  4,174  1,428                   1,303     795        747
 Total tenancies               26,624  20,913      3,304        -                            9,648  9,312  1,554                   1,388     1,353      1,185
 Tenancy ratio                 1.90x   1.92x       1.31x        -                            2.30x  2.23x  1.09x                   1.07x     1.70x      1.59x

 

 

                                                                        Central & Southern Africa
                               DRC                Congo Brazzaville                 Ghana                        South Africa           Madagascar
                               2023   2022        2023       2022                   2023        2022             2023     2022          2023    2022
 Standard colocation tenants   3,265  2,583  192             169        980                     762         252           233      108          93
 Amendment colocation tenants  378    158    33              28         358                     339         90            11       24           4
 Total colocation tenants      3,643  2,741  225             197        1,338                   1,101       342           244      132          97
 Total sites                   2,487  2,186  543             502        1,095                   1,109       377           362      583          489
 Total tenancies               6,130  4,927  768             699        2,433                   2,210       719           606      715          586
 Tenancy ratio                 2.46x  2.25x  1.41x           1.39x      2.22x                   1.99x       1.91x         1.67x    1.23x        1.20x

 

Revenue

Revenue increased by 31% to US$533.7m in the 9-month period ended 30 September
2023 (YTD 2022: US$408.8m). The acquisitions in Oman and Malawi contributed
US$54.7m to the year-on-year increase, alongside US$70.2m due to organic
tenancy growth and CPI and power price escalations in our existing markets.
For the period ended 30 September 2023, 98% of revenues were from
multinational MNOs and 64% were denominated in USD, CFA Franc (which is pegged
to the Euro) or Omani Rial (which is pegged to the US Dollar).

 

Contracted revenue

The following table provides our total undiscounted contracted revenue by
region as of 30 September 2023 for each of the periods from 2023 to 2027, with
local currency amounts converted at the applicable average rate for US Dollars
for the period ended 30 September 2023 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 MSAs, (iv) our customers do not terminate MSAs early for any reason and
(v) no automatic renewal.

 

 Year ended 31 December
                                 3 months to        2024   2025   2026   2027

                                 31 December 2023

                                 US$m               US$m   US$m   US$m   US$m
 Middle East & North Africa      13.9               48.1   48.1   48.1   48.1
 East & West Africa              70.4               296.2  295.3  252.3  241.4
 Central & Southern Africa       85.5               360.5  332.1  298.7  264.7
                                 169.8              704.8  675.5  599.1  554.2

 

The following table provides our total undiscounted contracted revenue by key
customer type as of 30 September 2023 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 2023 held constant. Our calculation uses the
same assumptions as above. The average remaining life of customer contracts is
7.8 years (Q3 2022: 7.0 years).

 

 (US$m)                                 Percentage of total

                     Total contracted   contracted revenues

                     revenues
 Multinational MNOs  5,471.4            99.1%
 Others              49.8               0.9%
                     5,521.2            100.0%

 

Adjusted EBITDA

Adjusted EBITDA was US$269.2m in the 9-month period ended 30 September 2023
(YTD 2022: US$206.8m). The increase in Adjusted EBITDA was driven by organic
tenancy growth and acquisitions in Malawi and Oman.

 

From a segment perspective, the year-on-year growth in the Group's Adjusted
EBITDA was driven by its East & West Africa segment, growing by US$27.9m
year- on-year, in addition to the Middle East & North Africa segment
expanding US$27.5m through the acquisition in Oman. The Central & Southern
Africa segment expanded by US$9.3m.

 

Adjusted EBITDA margin was 50% in the 9-month period ended 30 September 2023
(YTD 2022: 51%). The decrease reflects the impact of higher power prices that
resulted in both power-linked revenues and related operating expenses
increasing comparably, thereby diluting Adjusted EBITDA margin. Excluding the
impact of higher power prices, Adjusted EBITDA margin increased by 2ppt
year-on-year.

 

Portfolio free cash flow

Portfolio free cash flow increased by 36% year-on-year to US$197.1m (YTD 2022:
US$145.1m), driven by an increase in Adjusted EBITDA and lower tax payments,
partially offset by higher lease payments and maintenance and corporate
capital expenditure.

 

 9 months ended 30 September
                                                    2023    2022

                                                    US$m    US$m
 Adjusted EBITDA                                    269.2   206.8
 Less: Maintenance and corporate capital additions  (27.6)  (14.7)
 Less: Payments of lease liabilities(1)             (35.3)  (31.8)
 Less: Tax paid                                     (9.2)   (15.2)
 Portfolio free cash flow                           197.1   145.1
 Cash conversion %(2)                               73%     70%

1 Includes interest and principal repayments of lease liabilities.

2 Cash conversion % is calculated as portfolio free cash flow divided by
Adjusted EBITDA.

 

 

Gross debt, net debt, net leverage and cash & cash equivalents

 

Net leverage decreased by 0.6x year-to-date (Q4 2022: 5.1x) and by 0.3x
quarter-on-quarter (Q2 2023: 4.8x) to reach 4.5x, within the Group's
medium-term target range of 3.5x- 4.5x.

 

As previously announced, the Group raised up to US$720.0m loan and credit
facilities in September 2023. The facilities were used to tender US$325.0m
aggregate principal of the Group's senior notes in October 2023, repay US$65m
existing term loan and pay related fees and expenses, with the remaining
balance undrawn and available for future refinancing or general corporate
purposes. The net result of this activity increased the Company's weighted
average debt maturity by almost one year with only a marginal increase in cost
of debt, despite a rising rate environment, reflecting the improved
diversification and scale of the business.

 

                                30 September  31 December

                                2023          2022

                                US$m          US$m
 External debt(1)               1,658.5       1,571.6
 Lease liabilities              222.5         226.0
 Gross debt                     1,881.0       1,797.6
 Cash and cash equivalents      151.1         119.6
 Net debt                       1,729.9       1,678.0
 Annualised Adjusted EBITDA(2)  381.8         328.8
 Net leverage(3)                4.5x          5.1x

1         External debt is presented in line with the balance sheet at
amortised cost. External debt is the total loans owed to commercial banks and
institutional investors.

2         Annualised Adjusted EBITDA calculated as per the Senior
Notes definition as the most recent fiscal quarter multiplied by 4, adjusted
to reflect the annualised contribution from acquisitions that have closed in
the respective fiscal quarter. This is not a forecast of future results.

3         Net leverage is calculated as net debt divided by annualised
Adjusted EBITDA.

 
 
Capital expenditure

The following table shows capital expenditure additions by category during the
nine months ended 30 September:

 

              2023                 2022
              US$m   % of          US$m   % of

                     Total capex          Total capex
 Acquisition  12.4   8.3%          62.5   29.2%
 Growth       75.2   50.5%         120.2  56.0%
 Upgrade      33.7   22.7%         17.0   7.9%
 Maintenance  26.1   17.5%         13.4   6.3%
 Corporate    1.5    1.0%          1.3    0.6%
              148.9  100.0%        214.4  100.0%

 

Growth capital expenditure, which includes new BTS, colocations and
operational efficiency investments, decreased by US$45.0m year-on-year,
despite higher organic tenancy growth, largely reflecting the mix of new sites
and colocations. Upgrade capital expenditure, which reflects investments to
improve the structural quality of acquired sites, increased US$16.7m
year-on-year, largely reflecting the closing of the acquisition in Oman,
alongside investments in our other new markets. Maintenance and corporate
capital expenditure are trending in-line with full-year expectations.

 

 

 

Certain defined terms and conventions

We have prepared the annual 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 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.

'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.

'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 diesel emissions per tenant' have been calculated from diesel
consumption figures for our five established markets, comparing diesel
consumption on towers with one, two, three or four tenants.

'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.

'Average diesel emissions reductions' have been calculated from diesel
consumption figures for our five established markets, comparing diesel
consumption on towers with one, two, three and four tenants.

'Average grid hours' or 'average grid availability' reflects the estimated
site weighted average of grid availability per day across the Group portfolio
in the reporting year.

'B-BBEE' refers to 'Broad-Based Black Economic Empowerment' a South African
Government policy promoting the participation of ethnically diverse South
Africans in the local economy.

'BEIS' means Department for Business, Energy and Industrial Strategy.

'build-to-suit/BTS' means sites constructed by our Group on order by a MNO.

'CAGR' means compound annual growth rate.

'Carbon emissions per tenant' is the metric used for our intensity target. The
carbon emissions include Scope 1 and 2 emissions for the markets included in
the target and the average number of tenants is calculated using monthly data.

The 'Code' means the UK Corporate Governance Code 2018.

'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.

'CPI' means Consumer Price Index.

'Downtime per tower per week' refers to the average amount of time our sites
are not powered across each week.

'DEI' means Diversity, Equity and Inclusion.

'Deloitte' means Deloitte LLP.

'DRC' means Democratic Republic of Congo.

'EBT' means Employee Benefit Trust.

'ESG' means Environmental, Social and Governance.

'Executive Committee' means the Group CEO, the Group CFO, the regional CEO's,
the Director of Business Development and Regulatory Affairs, the Director of
Delivery and Business Excellence, the Director of Operations and Engineering,
the Director of Human Resources, the Director of Property and SHEQ and the
General Counsel and Company Secretary.

'Executive Leadership Team' means the Executive Committee, the regional
directors, the country managing directors and the functional specialists.

'Executive Management' means Executive Committee.

'Fatality frequency rate' refers to occupational fatalities per million hours
worked (five-year roll).

'FCA' means 'Financial Conduct Authority'.

'FRC' means the Financial Reporting Council.

'FRS 102' means the Financial Reporting Standard Applicable in the UK and
Republic of Ireland.

'FTSE WLR' means FTSE Women Leaders Review.

'FTSE' refers to 'Financial Times Stock Exchange'.

'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.

'Gabon' means Gabonese Republic.

'Ghana' means the Republic of Ghana.

'GHG' means greenhouse gases.

'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.

'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.

'GSMA' is the industry organisation that represents the interests of mobile
network operators worldwide.

'Hard currency Adjusted EBITDA' refers to Adjusted EBITDA that is denominated
in US Dollars, US$ pegged, US Dollar linked or Euro pegged.

'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 Oman' or 'HT Oman' means Oman Tech Infrastructure SAOC.

'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.

'IAL' means Independent Audit Limited.

'IFRS' means International Financial Reporting Standards as adopted by the
United Kingdom.

'independent tower company' means a tower company that is not affiliated with
a telecommunications operator.

'Indicative site ROIC' is for illustrative purposes only, and based on Group
average build-to-suit tower economics as of December 2022. Site ROIC
calculated as site portfolio free cash flow divided by indicative capital
expenditure. Site portfolio free cash flow reflects indicative Adjusted gross
profit per site less ground lease expense and non-discretionary capex.

'Indicative site Adjusted gross profit and profit/(loss) before tax' is for
illustrative purposes only, and based on Group average build-to-suit tower
economics as of December 2021. Site profit/(loss) before tax calculated as
indicative Adjusted gross profit per site less indicative selling, general and
administrative ('SG&A'), depreciation and financing costs.

'IPO' means Initial Public Offering.

'IS accreditations' refers to the International Organisation for
Standardisation and its published standards: ISO 9001 (Quality Management),
ISO 14001 (Environmental Management), ISO 45001 (Occupational Health and
Safety) and ISO 37001 (Anti-Bribery Management).

'Lath' means Lath Holdings, Ltd.

'Lean Six Sigma' is a renowned approach that helps businesses increase
productivity, reduce inefficiencies and improve the quality of output.

'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.

'Lost Time Injury Frequency Rate' means the number of lost time injuries per
1m person-hours worked (12-month roll)

'LSE' means London Stock Exchange.

'LTIP' means Long Term Incentive Plan.

'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.

'Mauritius' means the Republic of Mauritius.

'MSCI' means Morgan Stanley Capital International.

'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.

'Near miss' is an event not causing harm but with the potential to cause
injury or ill health.

'NED' means Non- Executive Director.

'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.

'Newlight' means Newlight Partners LP.

'Oman' means Sultanate of Oman.

'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, Malawi and Oman.

'Percentage of employees trained in Lean Six Sigma' is the percentage of
permanent employees who have completed the Orange or Black Belt training
programme.

'Population coverage' refers to the Company estimated potential population
that falls within the network coverage footprint of each of our towers,
calculated using WorldPop source data.

'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.

'Power uptime' reflects the average percentage our sites are powered across
each month, and is a key component of our service offering to customers.
Figures presented reflects towers that are under service level agreements with
customers.

'Principal Shareholders' refers to Quantum Strategic Partners Ltd, Helios
Investment Partners and Albright Capital Management.

'Project 100' refers to our commitment to invest US$100 million between 2022
and 2030 on carbon reduction and carbon innovation.

'Quantum' means Quantum Strategic Partners, Ltd.

'Road Traffic Accident Frequency Rate' means the number of work related road
traffic accidents per 1m km driven (12-month roll).

'ROIC' means return on invested capital and is defined as annualised portfolio
free cash flow divided by invested capital.

'Rural area' while there is no global standardised definition of rural, we
have defined rural as milieu with population density per square kilometre of
up to 1,000 inhabitants. These include greenfield sites, small villages and
towns with a series of small settlement structures.

'Rural coverage' is the population living within the footprint of a site
located in a rural area.

'Rural sites' means sites which align to the above definition of 'Rural area'.

'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.

'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.

'TCFD' means Task Force on Climate- Related Financial Disclosures.

'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.

'the Code' means the UK Corporate Governance Code published by the FRC and
dated July 2018, as amended from time to time.

'the Regulations' means the Large and Medium-sized Companies and Groups
(Accounts and Reports) regulations 2008 (as amended).

'the Trustee' means the trustee(s) of the EBT.

'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 tenancies' means total anchor, standard and amendment colocation
tenants as of a given date.

'tower contract' means the MLA and individual site agreements 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).

'towerco' means tower company, a corporation involved primarily in the
business of building, acquiring and operating telecommunications towers that
can accommodate and power the needs of multiple tenants.

'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.

'TSR' means total shareholder return.

'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.

'UK GAAP' means the United Kingdom Generally Accepted Accounting Practice.

'upgrade capex' or 'upgrade capital expenditure' comprises structural,
refurbishment and consolidation activities carried out on selected acquired
sites.

'US-style contracts' means the structure and tenor of contracts are broadly
comparable to large US-based companies.

'Viettel' means Viettel Tanzania Limited.

'Vodacom' means Vodacom Group Limited.

'Vodacom Tanzania' means Vodacom Tanzania 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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