Cellnex Telecom, Europe’s largest independent tower company, today announced its Q3 2021 earnings, reiterated its full-year 2021 outlook, and detailed its progress in closing its pan-European acquisitions, which will ultimately bring its portfolio to 130k towers and sites across Europe.
Financial Performance in Q3 2021, Outlook – Cellnex Telecom
In Q3 2021, Cellnex reported the following key metrics for the three months ended September 30, 2021:
- Revenue: €699m, equivalent to a 26% increase quarter-over-quarter
- Adjusted EBITDA: €531m, resulting in a 26% increase quarter-over-quarter and implying a 75.9% margin, which is a ~20 bps decline quarter-over-quarter
- Recurring Levered Free Cash Flow (RLFCF): €266m, equating to a 24% increase quarter-over-quarter
Given the company’s significant inorganic growth through M&A (see below), prior period comparisons are not as meaningful. However, Cellnex notes that it achieved organic growth of 6%+ year-over-year.
Revenue Composition
Decomposing the company’s €699m of revenue shows that wireless carriers contributed €619m (89% of total), broadcasting added €55m (8% of total), and other network services (e.g., Internet of Things) made-up the remaining €25m (4% of total).
Full-Year 2021 Outlook
At the mid-point of its full-year 2021 outlook, Cellnex projects revenue of €2.55bn, adjusted EBITDA of €1.92bn, and recurring levered free cash flow (RLFCF) of €960m. Indeed, this implies Q4 2021 financial performance at revenue of €785m, adjusted EBITDA of €586m, and RLFCF of €300m.
Operational Performance in Q3 2021 – Cellnex Telecom
As of Q3 2021, Cellnex had 89.3k operational tower sites, with 118.3k tenants, which equates to a tenancy ratio of 1.32x. Specifically, these operational sites are in the following countries, ordered by number of sites:
| Country | # of Sites | # of Tenants | Tenancy Ratio |
| Italy | 20.0k | 29.9k | 1.49x |
| Poland | 14.5k | 16.2k | 1.12x |
| France | 11.6k | 12.3k | 1.06x |
| Spain | 10.4k | 16.7k | 1.62x |
| United Kingdom | 8.0k | 11.7k | 1.46x |
| Switzerland | 5.4k | 6.1k | 1.14x |
| Portugal | 5.1k | 6.3k | 1.21x |
| Austria | 4.5k | 5.2k | 1.16x |
| Netherlands | 4.1k | 6.0k | 1.47x |
| Sweden | 2.6k | 3.3k | 1.27x |
| Ireland | 1.8k | 3.0k | 1.67x |
| Denmark | 1.4k | 1.5k | 1.10x |
| Total | 89.3k | 118.3k | 1.32x |
Once all pending acquisitions and build-to-suit (BTS) agreements have been completed, Cellnex’s portfolio will grow to 130k towers and sites across 12 European countries, as shown below:
Additionally, Cellnex operates 4.2k small cells and distributed antenna system (DAS) nodes throughout Europe.
Overall, including Cellnex’s pending acquisitions, the company’s future contracted sales (i.e., backlog) stands at ~€110bn, as of Q3 2021.
M&A Integration Process
As part of its Q3 2021 earnings release, Cellnex Telecom provided updates on its announced acquisitions in 2021, which together comprised ~€9bn of total investment.
- Pan-Europe (CK Hutchison’s towers): Cellnex has closed 18.6k sites in Austria, Denmark, Ireland, Sweden, and Italy, out of the total of 24.6k sites. Therefore, Cellnex still needs to close sites in the UK, which are scheduled for completion in the first-half of 2022
- France (Hivory): Cellnex closed its acquisition of 10.5k sites. However, per the French Competition Authority, the company must divest 3.2k rooftop sites, which it will subsequently manage
- Poland (Play and Polkomtel Infrastruktura): Cellnex closed both of its pending transactions in Poland which totaled 14.4k sites
- Netherlands (Deutsche Telekom towers): Cellnex closed its acquisition of 3.1k sites, enlarging its portfolio in the Netherlands to 4.1k sites
- Portugal (MEO): Cellnex announced, in June 2021, the incremental acquisition of 223 sites and 464 DAS and small cells in Portugal for €209m overall
