Vantage Towers, the second-largest independent tower company in Europe, today announced its financial results for the three- and twelve-months ending March 31, 2022 (Q4 FY22 and FY22) through which it provided updates on its tower portfolio, revised build-to-suit (BTS) program in Germany with Vodafone, and newly signed agreements in Spain, the Czech Republic, Hungary, Germany, and Greece.

Operational Performance in Q4 FY22 – Vantage Towers

Vantage Towers’ consolidated portfolio includes its operations in Germany, Spain, Greece, the Czech Republic, Portugal, Romania, Hungary, and Ireland. In addition, Vantage Towers has a 33.2% stake in INWIT (Italy), and 50% stake in Cornerstone (UK).

Consolidated Portfolio

As of March 31, 2022, Vantage Towers’ macro sites totaled 45.7k, across 8 European markets. Vantage has a total of 65.7k tenants with equipment on its towers, resulting in a tenancy ratio of 1.44x. Geographically, this portfolio includes 19.4k sites in Germany and 8.6k sites in Spain – the company’s two largest markets.

Vantage Towers delivered 510 net tenancy additions during the three months ending March 31, 2022 (Q4 FY22). In turn, through FY22, the company has added 1.68k net new tenancies over the past twelve months.

Build-to-Suit (BTS) Program

During the three months ending March 31, 2022 (Q4 FY22), Vantage Towers constructed 190+ BTS macro sites, bringing its total build-out for the twelve months ending March 31, 2022 (FY22) to 510+ BTS macro sites.

Through FY26, Vantage Towers intends to construct a total of 7.1k new sites via a build-to-suit (BTS) program with Vodafone. Of this total, Vantage Towers will build 5.5k sites (77% of total) in Germany by the end of FY26.

Revised Roll-Out Plan in Germany

During the quarter, Vantage Towers and Vodafone agreed to adapt their build-to-suit (BTS) program and master service agreement (MSA) terms in Germany. While Vodafone’s commitment to take 5.5k new sites until the end of FY26 remains unchanged, Vantage Towers now has the option to source up to 1.2k sites from third-party tower companies in Germany, as opposed to building from the ground-up. For example, these third-party tower companies in Germany could include American Tower and/or Deutsche Funkturm, a subsidiary of Deutsche Telekom.

Vantage Towers and Vodafone have agreed to an initial contract term of 15 years with the option to extend. As part of the agreement, Vantage Towers will charge Vodafone according to a new rate card and make a high-single-digit return on costs incurred. Additionally, Vantage Towers will generate an incremental high-single-digit return on capital expenditure upgrades spent by Vodafone in Germany, including its existing site portfolio.

For Vantage Towers, this revised roll-out plan is net present value (NPV) neutral and reduces the company’s capital intensity, while still supporting the coverage requirements of Vodafone. However, Vantage Towers’ reduction in its build commitment also coincides with the company facing challenges in building new sites, stating “the macro site build has been challenged, mainly by supply chain issues. We expect these challenges to persist into FY23 and to require continued management”.

Signed Agreements – Q4 FY22

Telefónica – Spain

In Spain, Vantage Towers signed an agreement with Telefónica for their 5G equipment upgrades at 1.5k+ existing sites over the next three years. Specifically, Vantage Towers will modify the infrastructure to host 5G equipment where Telefonica currently uses previous technologies (i.e., 3G and 4G).

Indoor Connectivity – Distributed Antenna Systems (DAS)

Across multiple markets in Europe, Vantage Towers signed agreements to strengthen indoor connectivity for customers by deploying distributed antenna systems (DAS).

  • Czech Republic: Vantage Towers signed a new 10-year agreement to provide DAS for the Military hospital in Prague to enable better coverage of surgical halls
  • Hungary: Vantage Towers signed an agreement with Futureal Group, a commercial real estate investor, to build a DAS network for phase II of its Budapest ONE office building. Also, Vantage Towers will retain the site operations & maintenance (O&M) and utilization rights of the on-site antenna system
  • Spain: Vantage Towers signed agreements to provide indoor coverage solutions for a supermarket chain across the country and a metro line of a major city in Spain
1&1 Versatel – Germany

In Germany, Vantage Towers signed a fiber sales agent agreement with 1&1 Versatel through which Vantage will sell 1&1 Versatel’s fiber services at Vantage Towers’ sites. This agreement builds on Vantage Towers’ existing relationship with 1&1 Versatel’s affiliate, 1&1 AG, a wireless carrier in Germany, to provide access to colocation on at least 3.8k and up to 5.0k existing sites throughout Germany.

Service Provider – Greece

In Greece, Vantage Towers signed a 5-year agreement with a telecommunications service provider to deploy a nationwide backbone microwave network.

Financial Performance in Q4 and FY22 – Vantage Towers

Q4 FY22 – Three Months Ending March 31, 2022

Vantage Towers’ revenue (excluding pass through) for the three months ending March 31, 2022 (Q4 FY22) was €265m, which implies 5.4% quarter-over-quarter growth. Within this total, the company generated macro site revenue of €236m (89% of total), which increased by ~2% quarter-over-quarter.

Overall, Vantage Towers’ macro site revenue is growing due to increased tenancies and contractual inflation-linked escalators that are built-in to its customer agreements. To this end, the company states that over 95% of its revenue is inflation-linked.

FY22 – Twelve Months Ending March 31, 2022

Vantage Towers’ revenue (excluding pass through) for the twelve months ending March 31, 2022 (FY22) was €1.01bn, which implies 4.6% year-over-year growth. Of this total, the company produced macro site revenue of €923m (91% of total), which increased by 2.7% year-over-year.

Additionally, for the twelve months ending March 31, 2022, Vantage Towers obtained revenue of €189m (~19% of total) from customers other than Vodafone. Indeed, this implies that Vodafone still represents ~81% of Vantage Towers’ revenue base, which has high customer concentration.

Geographic Segments

Vantage Towers’ two largest markets, Germany and Spain, both grew their revenues during the three- and twelve-months ending March 31, 2022:

  • Germany: revenue of €130m in Q4 FY22, an increase of ~6.5% quarter-over-quarter, and €492m for FY22, up 2.9% year-over-year
  • Spain: revenue of €45m in Q4 FY22, an increase of ~2% quarter-over-quarter, and €172m for FY22, up 7.5% year-over-year

Co-Controlled Joint Ventures

Vantage Towers’ co-controlled joint ventures include INWIT (33.2% ownership) and Cornerstone (50%). Particularly, the latest results available for these companies are as follows:

  • INWIT: total revenue of €785m for the twelve months ending December 31, 2021
  • Cornerstone: total revenue of €436m for the twelve months ending March 31, 2022

Guidance – FY23 (Financial Year Ending March 31, 2023)

Vantage Towers provided its revenue, EBITDAaL, and RFCF guidance for FY23 (financial year ending March 31, 2023), which is summarized below:

  • Revenue: €1.04bn to €1.06bn, implying 4.0% growth, at the mid-point, over FY22
  • EBITDA after Leases (EBITDAaL): €550m to €570m, inferring 3.1% growth, at the mid-point, over FY22
  • Recurring Free Cash Flow (RFCF): €405m to €425m, indicating no growth, at the mid-point, over FY22

Operating Expense Increase

In FY23, Vantage Towers will spend a further €10m to €15m to facilitate 1&1’s colocation on its existing sites, ramp-up its build-to-suit (BTS) program (supply chain, deployment, and IT), and build-out its supporting teams by adding FTEs. These operating expenses are all ahead of corresponding revenue contribution from FY24.

With these expenditures, the company’s is on track to deliver its overall mid-term tenancy ratio target of >1.5x. Indeed, this target is highly secured, as a result of the minimum additional 3.8k tenancies contracted with 1&1.

READ MORE: Vodafone Sells Stake in €16.2bn Vantage Towers to KKR and GIP

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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