Cellnex, Europe’s largest tower company, today announced its Q1 2021 earnings, provided updates on leasing wins for its towers, its short- and medium-term outlook to 2025, and its continued growth through acquisitions.

Financial Results in Q1 2021 and Outlook – Cellnex

In Q1 2021, Cellnex generated revenue of €506m, EBITDA of €381m, and recurring levered free cash flow (RLFCF) of €180m. 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 5%+ year-over-year.

Decomposing the company’s €506m of revenue further, wireless carriers contributed €426m (84% of total), broadcasting added €55m (11% of total), and other network services made-up €26m (5% of total).

Leasing Wins – Q1 2021

In Q1 2021, Cellnex highlights a key win in the UK with railway infrastructure owner and operator, Network Rail. Specifically, Cellnex is providing mobile internet, broadband, and fiber optic connectivity services along its entire London to Brighton railway route.

Additionally, in the Netherlands, Cellnex secured a contract with Dutch rail infrastructure operator ProRail. For ProRail, Cellnex will manage, operate, maintain, and expand the railway’s telecommunications infrastructure. In so doing, Cellnex will facilitate wireless connectivity along the 4.3k+ miles (7.0k+ kilometers) of rail networks that ProRail manages in the Netherlands.

Cellnex Railway Digital Infrastructure

For both Network Rail and ProRail, Cellnex will act as a neutral-host operator. Indeed, this means that Cellnex provides the digital infrastructure to ensure wireless connectivity in stations and railway networks. Moreover, Cellnex will enable the wireless carriers of the UK and the Netherlands to meet their coverage and capacity requirements in these railway locations.

Full-Year 2021 Outlook

At the mid-point of its outlook, Cellnex projects revenue of €2.4bn, EBITDA of €1.8bn, and recurring levered free cash flow (RLFCF) of €915m for full-year 2021.

Guidance to 2025

Because of Cellnex’s acquisition-fueled growth and corresponding tower build-to-suit (BTS) agreements, the company offers medium-term guidance to 2025. Indeed, this detail provides greater clarity on the company’s financial performance, once its acquisition integration process is further along. Specifically, for full-year 2025, Cellnex gives guidance of:

  • Revenue: €4.1bn to €4.3bn, representing a 21% compound annual growth rate (CAGR) to 2025
  • EBITDA: €3.3bn to €3.5bn, representing a 24% CAGR to 2025
  • RLFCF: €2.0bn to €2.2bn, representing a 28% CAGR to 2025

Operational Metrics at Q1 2021 – Cellnex

As of Q1 2021, Cellnex had 68.4k operational sites, with 91.2k tenants, which equates to a tenancy ratio of 1.33x. Specifically, these sites are in Italy (10.6k sites), France (10.6k sites), Spain (10.3k sites), the United Kingdom (8.0k sites), Poland (7.4k sites), Switzerland (5.3k sites), Portugal (5.1k sites), Austria (4.5k sites), Sweden (2.5k sites), Ireland (1.8k sites), Denmark (1.3k sites), and the Netherlands (0.9k sites).

Once all pending acquisitions and build-to-suit (BTS) agreements have been completed, Cellnex’s portfolio will grow to 129k towers and sites across 12 European countries, as shown below:

Cellnex Q1 2021 Europe Towers Footprint

Additionally, Cellnex owns 3.4k small cells and DAS nodes throughout Europe.

Overall, including Cellnex’s pending acquisitions, the company’s future contracted sales (i.e., backlog) stands at €110bn, as of Q1 2021.

M&A and Sources of Funding – Cellnex

During Q1 2021, Cellnex agreed to acquisitions in France (Hivory), the Netherlands (Deutsche Telekom towers), and Poland (Polkomtel Infrastruktura), comprising €9bn of total investment. Additionally, in Q1 2021, Cellnex completed the integration of CK Hutchison’s towers in Sweden and Play’s towers in Poland.

Cellnex Status of Tower Integration Process
Click here for a larger version of this image.

In order to fund this acquisition-led growth, Cellnex completed its fourth equity rights issue, for €7bn, during Q1 2021. Indeed, in the last 24 months, Cellnex has increased its equity capital by €14.7bn to finance its tower portfolio expansion.

Cellnex expects to use the proceeds from the €7bn equity capital increase to finance a portfolio of projects of up to €18bn, in the coming 18 months. Notably, of the €18bn figure, €9bn (50%) is already committed to Cellnex’s announced acquisitions in France, the Netherlands, and Poland.

Therefore, the remaining €9bn of buying power could be used to bulk-up in markets where Cellnex is currently sub-scale. Specifically, countries like Austria, Denmark, and Sweden have potential tower acquisition opportunities, whereby Cellnex could increase its scale.

Key Shareholders – Cellnex

Overall, Cellnex has a number of key institutional shareholders including GIC (9.5%), Edizione (8.5%), ADIA (5%), CPP Investments (5%), Criteria Caixa (4.8%), Wellington Management (4.3%), Capital Group (3.9%), BlackRock (3.8%), Fidelity (3.2%), and Norges Bank (3%).

Adam Simmons covers Towers for Dgtl Infra, including American Tower (NYSE: AMT), Crown Castle (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Cellnex Telecom (BME: CLNX), Vantage Towers (ETR: VTWR), IHS Holding (NYSE: IHS), and many more. Within Towers, Adam focuses on the sub-sectors of ground-based cell towers, rooftop sites, broadcast / radio towers, and 5G. Adam has over 7 years of experience in research and writing for Towers.


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