Helios Towers : 2023 Annual Report and Financial Statements

DRIVING THE GROWTH OF MOBILE COMMUNICATIONS ACROSS AFRICA AND THE MIDDLE EAST

Helios Towers plc Annual Report and Financial Statements 2023

About us

WHO WE ARE

We are a leading independent telecoms infrastructure company, with one of the most extensive tower portfolios across Africa and the Middle East.

OUR PURPOSE IN ACTIONDIGITAL INCLUSION

Empowering a new generation

READ MORE ON PAGE 08

LOCAL, DIVERSE, TALENTED TEAMS

Training our people for business excellence

CLIMATE ACTION

Investing in renewable power

READ MORE ON PAGE 09

RESPONSIBLE GOVERNANCE

Improving safety with robust reporting

Our business model promotes tower infrastructure sharing and enables mobile network operators

(MNOs) to deliver mobile connectivity more quickly, reliably, cost-effectively and with a lower carbon footprint. In turn, this supports the expansion and quality of mobile connectivity, driving sustainable development in our markets.

OUR PURPOSE

To drive the growth of mobile communications across Africa and the Middle East.

OUR MISSION

To deliver exceptional customer service through our business excellence platform, and create sustainable value for our people, environment, customers, communities and investors.

OUR VALUES

• - Integrity

• - Partnership

• - Excellence

READ MORE ON PAGE 10

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2023 HIGHLIGHTS

Sites

14,097

2022: 13,553

Tenancy ratio

1.91x

2022: 1.81x

Power uptime1

99.98%

2022: 99.96%

Population coverage1

144m

2022: 141m

Revenue

US$721m

2022: US$561m

Adjusted EBITDAΔ

US$370m

2022: US$283m

Operating profit

US$146m

2022: US$80m

ROICΔ

12.0%

2022: 10.3%

• 1 Please see the Glossary for definitions and methodologies of our non-financial KPIs.

• Δ Alternative Performance Measures are defined on pages 64-66.

Contents

WELCOME TO OUR ANNUAL REPORT AND FINANCIAL STATEMENTS

We apply integrated reporting as this best reflects our approach to sustainable business. We have a complementary Reporting Supplement, which includes additional ESG information and our disclosures against reporting frameworks such as the Global Reporting Initiative: heliostowers.com/investors.

We hope you find this report useful in understanding our business and performance, and we welcome any feedback at:[e-mail].

02	72	124
Strategic Report	Governance Report	Financial Statements

• 03 Our business model

  • 03 What we do

  • 04 How we do it

  • 05 Our value creation

  • 06 Our stakeholders

  • 07 Our impact

• 08 Our impact in action

• 12 Our markets

• 13 Chair's statement

• 15 Group CEO's statement

• 19 Q&A with our Group CEO and CFO

• 21 Strategic progress

• 22 Impact report

  22 Digital inclusion

  25 Climate action

  30 Local, diverse, talented teams

  34 Responsible governance

• 39 Market and operating review

  41 East & West Africa

  43 Central & Southern Africa

  45 Middle East & North Africa

• 47 Group CFO's statement

• 50 Non-financial and sustainability information statement

• 51 Risk management

• 52 Principal risks and uncertainties

• 57 TCFD disclosures

• 63 Viability statement

• 64 Alternative Performance Measures

• 67 Detailed financial review

• 73 Chair's introduction to the Governance Report

• 74 Compliance with 2018 UK Corporate Governance Code

• 75 Board of Directors

• 77 Group Executive Committee

• 78 Governance framework

• 79 Board leadership and Company purpose

• 82 Section 172(1) Statement

• 87 Division of responsibilities

• 89 Nomination Committee Report

• 92 Board diversity at a glance

• 94 Sustainability Committee Report

• 95 Technology Committee Report

• 96 Audit Committee Report

• 102 Directors' Remuneration Report

• 120 Other statutory information

• 123 Statement of Directors' responsibilities

• 125 Independent auditor's report to the members of Helios Towers plc

• 132 Consolidated Income Statement

• 132 Consolidated Statement of Other Comprehensive Income

• 133 Consolidated Statement of Financial Position

• 134 Consolidated Statement of Changes in Equity

• 135 Consolidated Statement of Cash Flows

• 136 Notes to the Consolidated Financial Statements

• 167 Company Statement of Financial Position

• 167 Company Statement of Changes in Equity

• 168 Notes to the Company Financial Statements

• 172 List of subsidiaries

• 173 Officers, professional advisors and shareholder information

• 174 Glossary

Strategic ReportGovernance ReportFinancial Statements

01

STRATEGIC REPORT

Governance ReportFinancial Statements

03 Our business model

15

Group CEO's statement

• 39 Market and operating review

  • 57 TCFD disclosures

    • 03 What we do

    • 04 How we do it

      • 19 Q&A with our Group CEO and CFO

• 41 East & West Africa

  • 63 Viability statement

• 43 Central & Southern Africa

  • 05 Our value creation

    • 21 Strategic progress

• 45 Middle East & North Africa

  • 64 Alternative Performance Measures

  • 06 Our stakeholders

    • 22 Impact report

• 47 Group CFO's statement

  67

  Detailed financial review

  • 07 Our impact

  • 22 Digital inclusion

    08 12 13

    Our impact in action Our markets

    25 Climate action

• 50 Non-financial and sustainability information statement

  Chair's statement

  • 30 Local, diverse, talented teams

• 51 Risk management

• 52 Principal risks and uncertainties

• 34 Responsible governance

02

Strategic Report

Our business model

WHAT WE DO

We build, acquire, lease-up and operate telecommunications towers that can accommodate and power the needs of multiple tenants.

Strategic Report

Our tenants are the major MNOs, and we serve them across nine high-growth markets. We offer a high-quality and comprehensive passive infrastructure solution that includes site selection and preparation, maintenance, security, power management and hosting of active equipment such as antennae.

Our infrastructure-sharing model supports the sustainable expansion of mobile connectivity. MNOs can roll out and densify mobile coverage faster, more reliably, more cost-effectively and with a lower environmental impact.

We are proud of our role in advancing access to mobile communications in our markets, which in turn contributes to social and economic development.

Build and acquire towers

We take a disciplined approach to acquisitions and building new sites, allocating capital to the highest returning opportunities.

Our build-to-suit (BTS) sites are driven by customer demand, with construction initiated only after we receive an order from at least one MNO.

Colocation lease-up

Our primary focus is to add additional tenants to our towers, sharing space and power equipment.

Lease-up delivers robust earnings growth, with each new colocation delivering c.80% Adjusted EBITDA margin flow-through, and allows customers to roll out more quickly and cost-effectively.

Drive operational improvements

We also improve site performance and returns through power optimisation and utilising Lean Six Sigma (LSS) principles.

Investments in power solutions that reduce our reliance on fuel such as grid connections, hybrid or solar solutions, lowers our carbon emissions and delivers a financial return.

Governance ReportFinancial Statements

03

HOW WE DO IT

OUR STRATEGY

Overview

Delivering the best customer service, including power uptime, network roll out speed, attractive pricing, capital efficiency and reduced carbon footprint enabled through our infrastructure-sharing model.

Investing in our people and partners, providing local employment, creating a culture of safety and embedding business excellence and Lean Six Sigma principles for more efficient and effective operations.

Disciplined approach to capital allocation and focus on efficiency drives the sustainable growth of our business, enabling mobile connectivity with fewer emissions and delivering value for all stakeholders.

OUR 2026 TARGETS

Strategic KPIs and 2026 targets

Downtime per tower per week

<30 seconds

New site/colocation roll out

90 days | 24 hours

Population coverage 164m

Employees trained in Lean Six Sigma 70%

Female employees 30%

Local employees >95%

Tenancy ratio 2.2x

Rural sites

6,000

Carbon reduction per tenant1 46%

OUR IMPACT

READ MORE ON PAGE 07

Digital inclusion

Responsible governance

Climate action

Local, diverse, talented teams

UNDERPINNED BY OUR VALUES

INTEGRITY

PARTNERSHIP

EXCELLENCE

Striving to do the right thing

Based on mutual respect and benefit

Our goal is to be the best we can be

1

2030 target reflects Scope 1 and 2 emissions and covers the five markets where we were operational in our 2020 baseline year.

Strategic Report

Governance ReportFinancial Statements

04

As the costs of operating a tower are largely fixed, tower companies generate the most attractive returns by adding more tenants to a tower.

OUR VALUE CREATION

Following a period of transformational platform expansion across 2020 to 2022, in which we effectively doubled our towers, 2023 was focused on organic growth and colocation lease-up.

In 2023, we added a record number of organic tenancies (+2,433), supporting lease-up of +0.1x to achieve a tenancy ratio of 1.91x. Consequently, return on invested capital (ROIC) increased +1.7ppt to 12.0%. The Group's loss before tax was US$112.2 million, an improvement of US$50.3 million year-on-year.

We expect ongoing statutory Group losses in the short-term whilst embedding and expanding our newly acquired assets. Nevertheless, with our focus on tenancy growth and operational efficiencies, we anticipate improved profitability. This transformation is evident in our five established markets, where our business is evolving towards profitability.

Our demonstrated ability to lease-up reflects our uniquely positioned platform. We largely operate in markets where we have a leading or sole market position, feature over three mobile operators on average and have significant infrastructure requirements, characterised by low mobile penetration and population growth. Combined with a build programme focused on identifying locations with the highest lease-up potential, we are able to deliver robust tenancy growth.

Accordingly, we target reaching a tenancy ratio of 2.2x by 2026 (2023: 1.91x), supporting continued ROIC expansion and increased profitability.

1.

For illustrative purposes only. Please see the Glossary for definitions.

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Governance ReportFinancial Statements

05

At Helios Towers, we take great pride in the strong relationships we have built with our diverse and valued stakeholders - our customers, investors, people and partners, and the communities and environments we operate within.

OUR STAKEHOLDERS

Together, these stakeholders form the pillars of our success, helping us to contribute towards and promote digital inclusion, sustainable development and prosperity in the markets where we operate.

Customers

Cost-effective tower usage: our leases are priced at a substantial discount to an MNO's total cost of ownership.

Reduction in MNOs' passive infrastructure capex requirements allows them to focus investment and resources on active equipment and technology upgrades.

Our people and partners

Employment, founded on a culture of safety, with training and development opportunities for a diverse localised workforce - for both us and our partners.

Investors

Opportunity to capture the unparalleled structural growth in mobile across Africa and the Middle East, with a robust and resilient business model.

Communities, economies and the environment

Supporting local economies and extending network coverage to reach rural locations, helping to connect the unconnected.

Reduced environmental footprint through infrastructure-sharing and power and maintenance efficiencies.

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06

OUR IMPACT

We report progress on our Sustainable Business Strategy through four key impact areas.

Digital inclusion

By growing our business and increasing access to mobile connectivity, we are promoting digital inclusion across Africa and the Middle East. Mobile is helping to connect individuals and communities to a range of life-enhancing services.

We support our MNO customers to roll out mobile networks more efficiently and at a lower cost, allowing them to focus resources on active equipment and technology upgrades.

READ MORE ON PAGE 22

Climate action

Our business model reduces the need for duplicate infrastructure and associated emissions, enabling a more integrated mobile network infrastructure to minimise environmental impact.

We strive to lower our carbon footprint as well as that of our customers, through deploying cleaner technologies where possible. Through Project 100, we are investing US$100 million in low-carbon solutions between 2022 and 2030.

READ MORE ON PAGE 25

Local, diverse, talented teams

Our ambition is to build a diverse and talented workforce by fostering a safe and collaborative environment to deliver on our business goals. We create employment, training and promotion opportunities for local people - our own colleagues and those who work for our partners.

Successful collaboration with our partners is essential for the construction and maintenance of our assets and maximising power uptime.

READ MORE ON PAGE 30

Responsible governance

We operate with a robust governance framework accredited to key ISO standards covering quality, environmental management, health and safety, information security and anti-bribery.

Our governance structures help us to deliver on our strategy, manage our performance and conduct business in an ethical and transparent manner. Our approach extends to our partners, through training and driving greater governance standards.

READ MORE ON PAGE 34

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07

Our impact in actionDIGITAL INCLUSION

EMPOWERING A NEW GENERATION

The mobile and computer became a window to a world of knowledge that I had never seen before. It opened my eyes to new possibilities.

Supporting rural communities with digital connectivity

Mwanaidi Othumani Student

Communication Service Access Fund (UCSAF), aimed at facilitating greater access to communications - particularly in rural and underdeveloped areas.

The training provided attendees with the digital skills to effectively create educational materials for the school population. Over 900 students will have access to digital learning through the new lab.

Strategic Report

One example of the positive impact our site builds can have is Matuli village in eastern Tanzania, which has a population of around 8,000 people. Previously, villagers walked more than three kilometres to reach 'the wonder tree' - 'Mti wa Maajabu' - to receive connectivity. With a new tower built, the villagers are now able to access a reliable connection across the village and neighbouring areas.

The launch was attended by our Group CEO Tom Greenwood and representatives from the Ministry of Education, with speakers encouraging the students to harness technology as tools for their personal growth and transformation.

Governance Report

In Tanzania, our largest market by site count, we continued to invest in rural expansion alongside our customers, supporting the Government's Digital Tanzania ambition for 80% of the population to receive network coverage by 20251.

Alongside our infrastructure roll out, we also have a strategic community investment programme, which looks to enhance local communities' digital access and experience. We support schools local to our towers through our Group-wide ICT lab initiative. Working with our NGO partner, Camara, we contributed to a new ICT lab at Mkwajuni Secondary School in Zanzibar, ready in time for the new school year.

Financial Statements

Group sites in rural locations

Since 2019, we have built over 290 sites in rural locations in Tanzania. This rollout has been in support of the Universal

Together with our local maintenance partner, we refurbished and equipped the lab to a safe standard. Camara conducted an intensive five-day training programme for 79 members of the school, including school leaders, teachers and students.

41%

People under the coverage footprint of our towers across all markets

1 Government of Tanzania, National Five Year Development Plan 2021-2026, 2021.

144m

08