EQS-News: Vantage Towers AG: Delivering robust 6% Group revenue growth in H1 and further progressing macro site new build in Q2

Group Summary Financial Results

Group Revenue (ex. pass-through) grew 6.0% YoY in H1 FY23, mainly driven by Macro site and Energy and other revenue. Macro site revenue grew 3.9% YoY in H1 FY23 accelerating in Q2 (+4.5%) vs. Q1 (+3.4%) driven by our contractual inflation escalators and tenancy growth. As previously disclosed, over 95% of our revenue is linked to inflation.

Energy and other revenue grew from 15.1m to 27.7m, mainly driven by other chargeable services to MNOs in H1.

Moreover, non-Vodafone revenue continues to grow and saw an increase of 11.5% YoY to 102.1m in H1 FY23 (H1 FY22: 91.5m).

In H1 FY23 we saw consistent revenue growth across all markets driven by contractual inflation escalators, tenancy growth, and other chargeable services to MNOs.

Germany also generated revenue growth from non-MNO contracts and Spain realised additional revenues from the active sharing agreement and incremental energy revenue as previously disclosed in Q1.

Adjusted EBITDA increased from 427.4m to 443.8m (+3.8%) with the adjusted EBITDA margin lower at 83.2% (H1 FY22: 85.6%) reflecting revenue mix and increases in non-lease operating expenses. As previously communicated, we expect to invest 10-15m in our business in FY23 to ramp up our BTS programme, to facilitate 1&1s access on our existing sites, and build out our supporting teams, all ahead of the corresponding revenue contribution from FY24 onwards. In H1 FY23, adjusted EBITDAaL increased 1.8% YoY with a corresponding margin of 52.1%. Our ground lease expenses increased by 4.4% YoY to 161.3m reflecting our macro site and tenancy growth alongside inflation escalators, which were partly offset by savings from the GLBO programme.

Recurring operating free cash flow (OpFCF) increased from 288.6m to 296.8m (+2.8% YoY) while recurring free cash flow (RFCF) stood at 220.2m in H1 FY23 reflecting good adj. EBITDAaL conversion (80.7%) and normalisation of working capital and cash tax payments relative to H1 FY22. Our FY23 guidance for RFCF remains unchanged at 405-425m.

Net Debt increased to 2,047.9m at H1 FY23 compared to 1,895.9m at FY22, mostly reflecting the 319m dividend paid in August offset by dividends received from the Company's associate and co-controlled joint venture investments.

Vantage Towers associate and joint venture 

The performance of both companies is in line with our expectations.

INWIT delivered solid financials and confirmed their targets for the current financial year. INWIT added 1.2k new tenants and more than 170 new sites between 1 January 2022 and 30 June 2022, bringing the tenancy ratio to 2.1x with a total of 23k sites. The INWIT renegotiation and land acquisition programme continues with a further 650 agreements.

Between 1 April 2022 and 30 September 2022, Cornerstone delivered total revenue of 228.9m driven by increase in new sites and tenancies.

Our Group Guidance

We confirm our guidance for FY23 as well as our medium-term targets

We confirm our unchanged FY23 Group outlook for Group Revenue (ex. pass through), adj. EBITDAaL, and RFCF and reconfirm our medium-term targets underpinned by continued focus on commercialisation and tenancy growth, BTS rollout, and progress being made in the GLBO programme.

APPENDIX

Non-IFRS Measures - Unaudited

The Group presents financial measures, ratios and adjustments that are not required by, or presented in accordance with, IFRS, German GAAP or any other generally accepted accounting principles on a consolidated basis (Non-IFRS Measures).

These Non-IFRS Measures on a consolidated basis should not be considered as an alternative to the consolidated financial results or other indicators of the Groups performance based on IFRS measures. They should not be considered as alternatives to earnings after tax or net profit as indicators of the Groups performance or profitability or as alternatives to cash flows from operating, investing, or financing activities as an indicator of the Groups liquidity. The Non-IFRS Measures as defined by the Group, may not be comparable to similarly titled measures as presented by other companies due to differences in the way the Groups Non-IFRS Measures are calculated. Even though the Non-IFRS Measures are used by management to assess ongoing operating performance and liquidity and these types of measures are commonly used by investors, they have important limitations as analytical tools, and they should not be considered in isolation or as substitutes for analysis of the Groups results or cash flows as reported under IFRS.

Definitions

Reconciliations of Non-IFRS measures

Adjusted EBITDA

The table below sets forth the reconciliation of the Groups non-IFRS measure adjusted EBITDA on a consolidated basis to profit before tax in the consolidated income statements for the periods indicated.

Adjusted EBITDAaL

The table below sets forth the reconciliation of the Groups non-IFRS measure adjusted EBITDAaL on a consolidated basis to profit before tax in the consolidated income statements for the periods indicated.

Recurring Operating Free Cash Flow and Recurring Free Cash Flow

The table below sets forth the reconciliation of the Groups non-IFRS measures Recurring Operating Free Cash Flow and Recurring Free Cash Flow to adjusted EBITDA for the periods indicated.

Net Financial Debt

The table below sets forth the calculation of the Groups non-IFRS measure Net Financial Debt from the Consolidated statement of financial position as at 31 March 2022 and 30 September 2022.

Glossary

Disclaimer on forward looking statements

This announcement contains "forward-looking statements" with respect to Vantage Towers results of operations, financial condition, liquidity, prospects, growth, and strategies. Forward-looking statements include, but are not limited to, statements regarding objectives, targets, strategies, outlook, and growth prospects, including guidance for the financial year ending March 31, 2023, medium-term targets, new site builds, tenancy targets and the tenancy pipeline; Vantage Towers working capital, capital structure and dividend policy; future plans, events, or performance, economic outlook, and industry trends.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "will", "could", "may", "should", "expects", "intends, prepares" or "targets" (including in their negative form or other variations). By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. All subsequent written or oral forward-looking statements attributable to Vantage Towers or any member of the Vantage Towers Group, or any persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in this document will be realised. Any forward-looking statements are made of the date of this announcement. Subject to compliance with applicable law and regulations, Vantage Towers does not intend to update these forward-looking statements and does not undertake any obligation to do so.

References to Vantage Towers are to Vantage Towers AG and references to Vantage Towers Group are to Vantage Towers AG and its subsidiaries unless otherwise stated.

Rounding

Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

[1] The non-IFRS measures presented in this announcement are defined and reconciled on pages 5-8.

[2] Consolidated refers to our reporting segments Germany, Spain, Greece, and Other European Markets, in which we have a controlling interest.

[3] Non-committed refers to tenancies that were not already committed in November 2020 at the Capital Markets Day.

[4] Medium-term targets of the Consolidated Group excluding INWIT and Cornerstone.

[5] Assuming capacity to invest in organic or inorganic opportunities up to leverage of 5.5x Net Financial Debt / Adj. EBITDAaL to maintain investment grade rating.