Vodafone : Vantage Towers

• Europe's leading tower infrastructure platform with over 68,000 towers across 9 markets
• #1 or #2 tower market share position by number of sites in almost all markets
• Creation of Greece's leading tower infrastructure company through merger with Wind Hellas' tower assets (announced today)
• Aggregated FY20 pro forma consolidated adjusted EBITDA and Vantage Towers' 33.2% share of INWIT pro forma adjusted EBITDA, of €680 million1
• Potential to include Vodafone's 50% stake in CTIL, the leading tower infrastructure company in the UK, with 14,300 towers and 50% share of estimated FY20 pro forma adjusted EBITDA, amounting to €50-70 million
• On track for an IPO in early 2021, targeting a Prime Standard Listing in Frankfurt

Vodafone, Europe's leading provider of converged fixed, mobile and TV services, introduces today Vantage Towers, Europe's leading tower infrastructure platform. Vantage Towers supports Europe's digitalisation by establishing and maintaining extensive, high quality and resilient networks, which form the backbone of digital services and a sustainable digital society. The Vantage Towers senior management team is fully in place, led by Vivek Badrinath (CEO), Thomas Reisten (CFO) and Sonia Hernandez (CCO). Vantage Towers has highly secure, predictable cash flows underpinned by long-term, inflation-linked contractual arrangements with highly rated tenants, including Vodafone as the anchor tenant. The group benefits from a tenancy ratio of 1.5x across the portfolio, including INWIT. There are also compelling structural growth opportunities from mobile coverage obligations and increasing end-user demand for data, with potential to expand into adjacent services and from disciplined M&A.

Nick Read, Vodafone Group Chief Executive, commented:

'Today's launch of Vantage Towers marks significant progress of the strategy I established when I became Vodafone CEO, specifically relating to the key pillar of improving asset utilisation. Vantage Towers will also unlock further value for shareholders, notably through the IPO targeted for early 2021. As Europe's leading mobile and fixed services provider, we have now created Europe's leading tower infrastructure company, which will play a central role in enabling Europe's sustainable and inclusive digital society.'

Vivek Badrinath, Vantage Towers Chief Executive, commented:

'I am excited to lead Vantage Towers, which owns the tower infrastructure that is critical for the digital services upon which society, customers and governments rely on across 9 European markets. We have a strong platform to capture growth opportunities in connectivity across Europe, leveraging our long-term arrangements with leading operators. Today I am also pleased to announce the merger of Vodafone's and Wind Hellas' towers businesses in Greece, which creates the leading tower infrastructure company in Greece.'

1 This figure is composed of the FY20 pro forma consolidated adjusted EBITDA of Vantage Towers of €523 million plus the Group's 33.2% share of INWIT CY19 pro forma adjusted EBITDA of €157 million. The results of INWIT will be equity accounted by Vantage Towers.

The European tower infrastructure leader

Vantage Towers is Europe's largest and most geographically diversified tower company, with over 68,000 sites across 9 markets - it holds a #1 or #2 market position by sites in almost all of them. It will have a controlling interest in 8 markets: Germany, Spain, Greece, Portugal, Czech Republic, Romania, Hungary and Ireland ('Consolidated Vantage Towers'). Vantage Towers will also own a 33.2% equity stake in Infrastrutture Wireless Italiane S.p.A ('INWIT') in Italy, with co-control rights under the terms of a shareholder agreement with Telecom Italia. The Cornerstone Telecommunications Infrastructure Limited ('CTIL') portfolio, with 14,300 sites in the UK, may be added with the inclusion of Vodafone's 50% equity stake in CTIL.

This portfolio of assets will be supported by long-term contractual commitments with highly rated tenants, which provide resilient and predictable inflation-linked revenues. This includes the anchor tenant Master Services Agreement ('MSA') with Vodafone, the leading provider of converged fixed, mobile and TV services in Europe, which represents c.a.90% of Vantage Towers' FY20 pro forma revenue.

Vantage Towers is a 'next generation' tower infrastructure company bringing together a combination of four key factors: (i) owning fully integrated nationwide networks, that will be underpinned by stable, secure, long-term contractual arrangements with a high-quality customer base, including leading mobile operators in each market; (ii) possessing towers that are part of the essential consolidated grid of at least two of the largest mobile operators in markets where Vodafone has already agreed nationwide active sharing agreements, including Italy, Spain, Greece, the UK and Romania; (iii) expanding the services offered beyond the traditional role of an infrastructure landlord to mobile operators, to the role of an innovative network enabler for a range of existing and new digital network user customers; and (iv) being at the forefront of enabling a resilient, inclusive digital society with a clear focus on sustainable infrastructure to minimise environmental impact.

Vantage Towers has an attractive operating model that delivers committed, long-term, inflation linked returns. During FY20, on a pro forma basis, its resilient revenues yielded an adjusted EBITDA margin of 55%, low maintenance capex of 3% of revenues and strong cash conversion of 94%.

Vantage Towers is well-positioned to benefit from attractive long-term trends delivering growth and value opportunities across each of its markets from: (i) coverage obligations of Vantage Towers' customers, (ii) strong data usage growth driving further densification requirements, (iii) the roll-out of 5G, (iv) new customers, (v) efficiencies, (vi) adjacent services, and (vii) inorganic growth opportunities. With its extensive footprint and strong relationships with leading mobile operators, Vantage Towers is well placed to capitalise on these market trends by attracting new tenants onto its existing towers and deploying new sites. Opportunities also exist to deliver efficiencies by driving best practices and optimising costs across Vantage Towers' site portfolio. Further growth could be achieved from adjacencies such as wholesaling fibre backhaul and the further expansion of the customer base beyond mobile operators.

Vantage Towers will be at the forefront of enabling a resilient, inclusive digital society with a clear focus on sustainable infrastructure to minimise environmental impact. To maximise the positive impact of better connectivity for societies, Vantage Towers has developed a purpose-led strategy built on three key pillars: People, Performance and Planet.

People: Vantage Towers is building a diverse team of individuals, managers and engineers, creating the optimal talent mix for driving the business forward.

Performance: Vantage Towers is focused on acquiring and building industry-leading infrastructure, enhanced by technology, to deliver a full service offering to its customers.

Planet: As Vantage Towers expands connectivity and builds a better digital future for Europe, it will seek to do so with a minimal impact on the planet itself. Better connectivity also brings with it the opportunity to advance new, greener ways of working and living. Sustainability is a core focus for Vantage Towers, including the use of renewable energy sources, maximising the re-use and recycling of redundant network equipment, ensuring energy metering on sites for energy efficiency and maintaining a sustainable supply chain.

Key portfolio metrics