▪ REVENUES: IN Q2 2021 THEY CAME TO 192.9 MILLION EUROS, SHOWING ORGANIC GROWTH OF +4.5% COMPARED TO THE SAME PERIOD OF 2020. IN H1 2021 THEY TOTALLED 383.1 MILLION EUROS, UP +2.2% COMPARED TO H1 2020, LIKE-FOR-LIKE.
▪ EBITDAaL (EBITDA - LEASING COSTS): THE COMPANY'S MAIN OPERATING MARGIN, IN Q2 2021 STOOD AT 127.2 MILLION EUROS, UP BY +6.9%. IN H1 2021 IT TOTALLED 251.1 MILLION EUROS, UP +7.6%, LIKE-FOR-LIKE.
▪ NET PROFIT: IN Q2 2021 IT TOTALLED 51.5 MILLION EUROS, UP BY +35.2% COMPARED TO THE SAME PERIOD OF 2020. DURING H1 2021, THIS CAME TO 95 MILLION EUROS.
▪ RECURRING FREE CASH FLOW: IN Q2 IT TOTALLED 91.3 MILLION EUROS, UP BY +14.9% COMPARED TO THE SAME PERIOD OF 2020. DURING H1 2021, THIS CAME TO 184.4 MILLION EUROS.
▪ IN Q2 THE BUSINESS CONTINUED TO GROW WITH 1,200 NEW HOSTINGS FOR MOBILE OPERATORS, FWA AND OTHERS. OVER 350 NEW REMOTE DAS (DISTRIBUTED ANTENNA SYSTEM) UNITS WERE INSTALLED FOR INDOOR MICRO COVERAGE.
▪ NET DEBT: CAME TO 4.1 BILLION EUROS, WITH FINANCIAL LEVERAGE AT 5.9X AS THE RESULT OF PAYMENT OF THE DIVIDEND, EQUAL TO 283.9 MILLION EUROS, AND THE ONE-OFF PAYMENT RELATING TO THE TAX BENEFITS ON GOODWILL, EQUAL TO 334 MILLION EUROS.
▪ GUIDANCE 2021 CONFIRMED: REVENUES AND EBITDA IN THE LOWER PART OF THE RANGE, AS A RESULT OF THE TIME FOR DEVEOPLING NEW HOSTINGS; EBITDAaL AND RFCF IN THE UPPER PART OF THE RANGE, THANKS TO THE EFFECTIVENESS OF THE ACTIONS TAKEN TO OPTIMISE LEASING COSTS AND NET WORKING CAPITAL.
▪ AGREEMENT APPROVED WITH VODAFONE ITALIA FOR THE COVERAGE OF MOTORWAY AND ROAD TUNNELS (APPROXIMATELY 1,000 KM).
▪ FERIGO: 'ANOTHER QUARTER SHOWING GROWTH WITH AN INCREASE IN NEW HOSTINGS, THE BUILDING OF NEW SITES AND A ACCELERATION OF FINANCIAL INDICATORS. WE APPRECIATE THE RULES FOR SIMPLIFYING THE AUTHORISATION PROCEDURES INTRODUCED BY THE GOVERNMENT AND PARLIAMENT IN THE SIMPLIFICATIONS DECREE LAW. A GREAT
DEAL OF PROGRESS HAS BEEN MADE IN THIS PERIOD, FOR AN INCREASINGLY SUSTAINABLE BUSINESS'.
Rome, 29 July 2021 - The Board of Directors of Infrastrutture Wireless Italiane S.p.A. (INWIT), met today, chaired by Emanuele Tournon, and examined and approved the financial report as of 30 June 2021.
Q2 2021 main results
The results of the second quarter of 2021 confirm the growth of the main industrial KPIs, revenues and an improvement in the profitability and cash generation:
• Revenues came to 192.9 million euros with +4.5% organic growth in the second quarter of 2021 on the previous year, a consequence of the progressive impact of new hostings contracted in the previous quarters.
• EBITDA was 175.9 million euros, an increase of +2.5% on the same period of 2020. The EBITDA margin came in at 91% of revenues.
• This growth, together with greater efficiency in leasing costs, has led to expansion of the EBITDAaL margin, which came to 127.2 million euros (+6.9 %), accounting for a rise in revenues from 64% in Q2 2020 to 66%.
• Net profit totalled 51.5 million euros, up +35.2% compared to the same period of 2020. • Recurring Free Cash Flow totalled 91.3 million euros, up by +14.9% compared to the same period of 2020.
• Net financial debt at 30 June 2021 amounted to 4.1 billion euros. The increase, in line with expectations, is due to the payment of the dividend, equal to 283.9 million euros and the one-off payment relating to tax benefits on goodwill, of 334 million euros. Financial leverage comes to 5.9X in line with expectations; it is also noted that the recent transactions on the bank and bond market have helped assure the progressive optimisation of debt in terms of the diversification of sources, cost and duration;
• The industrial results confirm the growth trend of the main indicators:
• approximately 1,200 new hostings were contracted, essentially due to the contribution of the anchor customers, Tim and Vodafone, as well as other customers;
• the new site development programme has been boosted, with the construction of approximately 130 towers;
• the multi-operator micro-cell coverage plan continues in the locations with the highest concentration of users and traffic, deploying more than 350 new remote DAS units, as evidence of the constant market interest;
• efficiency continued to improve, with the pursuit of the plan to renegotiate leasing contracts and purchase land.
• 2021 Guidance has been confirmed: revenues and EBITDA in the lower part of the range, as a result of the time for developing new hostings; EBITDAaL and RFCF in the upper part, thanks to the effectiveness of the action taken to optimise leasing costs and net working capital.
Main results at 30 June 2021
In the first half of FY 2021 all main economic and financial indicators showed growth, also due to the merger with Vodafone Towers on 31 March 2020.
Revenues stood at 383.1 million euros, up +33.3% on the same period of 2020 (287.4 million euros). The periods in question include one-off revenues. On a like-for-like basis, revenues were up +2.2% on the half-year of 2020.
EBITDA was 348.9 million euros, up by +34.4% on the first half of 2020. EBITDAaL was 251.1 million euros, up by +42.7% compared to the same period of 2020. On a like-for-like basis, EBITDAaL was up +7.6% on the half-year of 2020. Net profit for the period totalled 95 million euros, up +32.6% compared to the same period of 2020. Recurring Free Cash Flow for H1 2021 was 184.4 million euros, up by +42.1% compared to the same period of 2020. Business investments for the period came to 54.4 million euros, up 20.7 million euros on H1 2020 (+61.6%) and were mainly allocated to the development of new sites, of indoor micro-cell coverage with DASs and the acquisition of land.
Loan agreement with the European Investment Bank (EIB).
INWIT has reached an agreement for a loan of 250 million euros from the European Investment Bank (EIB) in support of the company's investment plan, intended to develop the company's digital infrastructure in Italy. The loan, currently being completed, is in line with the INWIT Business Plan, which envisages investments in the construction of new towers for the distribution of 5G, the deployment of coverage of indoor and outdoor mobile networks with small cells and DAS (Distributed Antenna Systems) and to trial new innovative technologies in support of operators. This network infrastructure will also be available for hosting Fixed Wireless Access (FWA) equipment, to expand coverage of broadband in areas with low- population density.
Sustainability Plan progress
During the first half of the year, the transformation of the company into an increasingly sustainable business continued strongly, with the aim of generating long-term value and helping drive, improve and assure the social and economic development of the communities in which we operate. More specifically, in these first six months of 2021, we have:
- prepared our first Integrated Report, with the aim of providing our stakeholders with a complete overview of the strategy, operating model and governance, supplementing the financial information with non-financial information. The document has been prepared on the basis of the criteria of the Framework, which calls for an explanation of the process with which an organisation creates value over time, using a structure that mirrors the breakdown by capital, defined as variables that determine the creation of value.
- We have issued our first sustainability-linked term loan worth 500 million euros, linked to specific targets of our Sustainability Plan.
- We have organised our first Stakeholder Forum, aware that the creation of value must involve stakeholder relations as an integral part of responsible, sustainable business management, in line with the indications of the new Corporate Governance Code.
- We have continued to invest in the workforce growth plan and in strengthening our skills: at 30 June, INWIT numbered 238 employees, compared with 122 before the merger with Vodafone Towers. In particular, 43% of entrances this first half are women, who today account for 37% of the total workforce, up on the 34.9% at end 2020.
- The actions envisaged by our 2021-2023 Sustainability Plan also include having: o defined the Stakeholder Engagement Management Policy and the Diversity & Inclusion Policy, both approved by the BoD and published on our website, to provide ever greater transparency of our commitments;
o defined a climate strategy, which allows us to achieve carbon neutrality by 2025. We have, in fact, identified a series of consistent initiatives, starting from the development of a climate change scenario analysis, to stimulate the company to develop a long-term strategic vision, which considers the risks and opportunities associated with climate change;
o developed, for our people, a training plan that has allowed us to deliver more than 11,000 training hours in the first half, involving all employees, with approximately 60 hours per capita.
All activities carried out for sustainability, in particular the new Plan and first Integrated Report, have made it possible to obtain improvements in the ESG rating: Sustainalytics has updated our ESG Risk Rating, taking it from Medium Risk (24.4/100) to Low Risk (19.4/100), while FTSE Russell has taken our ESG Rating from 2.2 to 2.9, on a scale of 1-5, with an improvement in the percentile rank of the sector, from 22 to 34.
'Another growth quarter with new hostings, new sites, DASs for indoor micro-cell coverages developed and an acceleration of financial indicators - commented Chief Executive Officer, Giovanni Ferigo. - I am satisfied with the entrance into the segment of dedicated motorway and road tunnel coverage, which confirms the INWIT contribution to the digital development of the country in support of telecommunications operators. With a view to further speeding up our infrastructure development plans, we appreciate the rules for simplifying the authorisation procedures introduced by the government and parliament in the 'Simplifications Decree Law'. INWIT plays an important role, the industrial value of which has also been recognised by the agreement with the EIB for the first loan of our investment plans. The progress made in this period for an increasingly sustainable business also make us very proud'.
Corporate Governance Issues
Under the scope of the continuous alignment of corporate governance with the corporate governance rules, the Board of Directors has approved the quantitative and qualitative criteria for the analysis of relations between INWIT and its directors in order to assess the independence requirements in accordance with recommendation 7, first period, letters c) and d) under Article 2 of the Corporate Governance Code of listed companies.
The Board of Directors has also approved the Environment, Health and Safety at Work Policy to guarantee the continuous improvement of environmental and safety performance and processes, with a view to integrating sustainability and creating a business culture.
The COVID-19 health emergency has brought about a decline in the economy, with potentially negative impacts on the Company's economic and financial position. The rapid spread of COVID 19, beginning in March 2020, and the ensuing health emergency, have produced great economic uncertainty both in Italy and across the globe.
The Company deems the situation to be medium risk as, despite the negative economic situation, INWIT's activity is essential for the provision of services to operators; at present, the Company has not recorded any significant impact on business performance associated with the health crisis.
The Company maps out COVID-19-related risks and assesses the possible onset of the events affected by such risks, which are considered unlikely, given that the relevant industrial sector is not particularly volatile, existing hostings have a cyclical nature and contracts are long-term.
At present, the economic results have suffered no significant negative impacts that could give rise to losses in economic/financial performance or delays in the company's strategic planning.
Lastly, it should be noted that the current pandemic has led to a general acceleration in the digitisation processes and a significant increase in data traffic on the networks of the Company's main customers, resulting in a positive impact on demand for the services offered.
Outlook for the 2021 financial year
Strengthened by a deep-rooted transformation, after the merger with Vodafone Towers, INWIT has become the largest operator in the Wireless Infrastructure sector in Italy, with the mission of supporting the TIM and Vodafone anchor tenants in creating the new network for the deployment of 5G, also ensuring access to its infrastructure for the entire market.
The results of the first half of 2021 recorded an increase for all main economic indicators compared to the same period of 2020, speeding up organic growth in the second quarter of 2021. Investments in the period for 54.4 million euros focused, as per the plan, on the creation of new sites (towers), the deployment of indoor and outdoor micro-coverage with DAS (Distributed Antenna System) and an increase in owned plots of land.
In November 2020, INWIT presented an update to the 2021-2023 industrial plan, whose forecasts, including those for FY 2021, are confirmed. During the first six months of 2021, INWIT recorded strong growth of new hostings, approximately 2,400 as compared with around 250 in 1H 2020. The time for developing new hostings, mitigated by action taken on other sources of revenue, lead the company to envisage Revenues and EBITDA for FY 2021 in the lower part of the guidance range, 785-795 million euros and 715-725 million euros, respectively. The continuous action to reduce leasing costs, together with the optimisation of net working capital, instead lead the company to forecast EBITDAaL and Recurring Free Cash Flow for FY 2021 in the upper part of the guidance range, 510-520 million euros and 355-365 million euros, respectively.
From an operative viewpoint, over the next quarters of 2021, the company will continue to focus on the construction of new sites, on the growth of hosting and on the development of revenues from new services. The objective of optimising leasing costs, a driver to expand the EBITDAaL margin and the growth of Recurring Free Cash Flow has also been confirmed.
In the wireless infrastructure market, the profound transformation process and increased demand for services from mobile operators and other radio network players is continuing. Mobile operators need to increase their service access points to expand their 4G coverage and deploy 5G. Fixed wireless access providers are also increasing their networks to expand coverage and improve the quality of service offered to customers.
It is also expected that business performance will benefit from the improved outlook for the digital, infrastructural and technological investment cycle in Italy: the major resources allocated by Next Generation EU can, both directly and indirectly, support INWIT's development, which is excellently positioned as an enabler of the digital transformation currently in motion.
The economic and financial results of INWIT at 30 June 2021 will be illustrated to the financial community during a conference call scheduled for 29 July 2021 at 6.30 p.m. (CET). Journalists may listen to the conference call, without asking questions, by calling: +39 02 8020927. The presentation to support the conference call will be made available in advance in the Investors section of the company website www.inwit.it.
The executive responsible for preparing the corporate accounting documents, Diego Galli, declares, in accordance with
subsection 2, Art. 154-bis of the Consolidated Law on Finance, that the accounting information given in this press release corresponds to the documentary evidence and the accounting books and records.
Infrastrutture Wireless italiane S.p.A.