TIDMHTWS
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
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
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 East & West Central & Southern
& North Africa(3) Africa(4) 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 East & West
& North Africa 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$70.2m due to organic tenancy growth and CPI and power
price escalations in our existing markets. For the period ended 30
September 2023, 98% of revenues were from multinational MNOs and
64% were denominated in USD, CFA Franc (which is pegged to the
Euro) or Omani Rial (which is pegged to the US Dollar).
Contracted revenue
The following table provides our total undiscounted contracted
revenue by region as of 30 September 2023 for each of the periods
from 2023 to 2027, with local currency amounts converted at the
applicable average rate for US Dollars for the period ended 30
September 2023 held constant. Our contracted revenue calculation
for each year presented assumes: (i) no escalation in fee rates,
(ii) no increases in sites or tenancies other than our committed
tenancies, (iii) our customers do not utilise any cancellation
allowances set forth in their MSAs, (iv) our customers do not
terminate MSAs early for any reason and (v) no automatic
renewal.
Year ended 31 December
3 months
to
31 December
2023 2024 2025 2026 2027
------------
US$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).
Percentage
of total
Total contracted contracted
(US$m) 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$m
------------------------------ ------------ -----------
External debt(1) 1,658.5 1,571.6
Lease liabilities 222.5 226.0
------------------------------ ------------ -----------
Gross debt 1,881.0 1,797.6
Cash and cash equivalents 151.1 119.6
Net debt 1,729.9 1,678.0
------------------------------ ------------ -----------
Annualised Adjusted EBITDA(2) 381.8 328.8
------------------------------ ------------ -----------
Net leverage(3) 4.5x 5.1x
------------------------------ ------------ -----------
1 External debt is presented in line with the balance sheet at
amortised cost. External debt is the total loans owed to commercial
banks and institutional investors.
2 Annualised Adjusted EBITDA calculated as per the Senior Notes
definition as the most recent fiscal quarter multiplied by 4,
adjusted to reflect the annualised contribution from acquisitions
that have closed in the respective fiscal quarter. This is not a
forecast of future results.
3 Net leverage is calculated as net debt divided by annualised Adjusted EBITDA.
Capital expenditure
The following table shows capital expenditure additions by
category during the nine months ended 30 September:
2023 2022
----- ------ ----- ------
% of % of
Total Total
US$m capex US$m 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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END
QRTNKDBNDBDBBDK
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November 02, 2023 03:00 ET (07:00 GMT)
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