ResultsH1 2020
13 August 2020
Helios Towers team today
1Helios Towers plc
Tom GreenwoodChief Operating
Officer
Kash PandyaChief Executive
Officer
Manjit DhillonInterim Chief
Financial Officer
Agenda
Highlights – Kash Pandya, CEO1
Senegal Expansion – Tom Greenwood, COO2
Financial Results – Manjit Dhillon, Interim CFO3
Q&A4
2Helios Towers plc
Highlights
H1 2020 highlights
+10% Adj. EBITDA growth from $99m in H1 19 to $109m in H1 20, with margin expansion of +1ppt to 53%
CONTINUED EBITDA
EXPANSION…FINANCIAL
STRONG REVENUE
GROWTH+7% revenue growth from $191m in H1 19 to $204m in H1 20
STRATEGIC/
OPERATIONAL
Signed agreement to acquire 1,220 sites from Free Senegal for upfront cash consideration of €160m ($189m), with 400 new sites committed over next five years for c.€70m ($82m) in deferred consideration and growth capex(2)
M&A STRATEGY
NEW MARKETS
(1) Portfolio free cash flow is defined as Adj. EBITDA less payment of lease liabilities, tax paid and maintenance and corporate capital additions.(2) €70m reflects €40m in deferred consideration and c. €30m of growth capex investment.
Successfully completed refinancing with issuance of $750m 7% bond alongside term loan of up to $200m and RCF of $70m, reducing cost of debt, extending maturities and providing additional capital for expansion
IMPROVED FINANCING
STRUCTURE
Tom Greenwood appointed to newly created role of Chief Operating Officer, in order to focus on driving HT’s expansion and M&A strategy
LEADERSHIP
CHANGE
Portfolio free cash flow of $89m(1) for H1 20, a +12% increase YoY…DRIVING CASH FLOW
GENERATION
Site growth of +3% YoY to 7,092 and tenancy growth of +6% YoY to 14,906, resulting in a +0.05x tenancy ratio increase to 2.10x
SOLID SITE AND
TENANCY GROWTH
4Helios Towers plc
Signed two bolt-on acquisitions, reflecting 80 sites in Q2 across South Africa and Congo B, with 19 additional sites expected later in the year
M&A STRATEGY
EXISTING MARKETS
105
146
178
205220
37%
42%
50%
53% 54%
2016 2017 2018 2019 2020 LQA
H1 2020: Strong returns and consistent growth
• LQA Adj. EBITDA of $220m, reflecting 7% growth from $205m in FY 19 and our 22nd consecutive quarter of growth
• LQA portfolio free cash flow of $173m, increasing 2% from FY 19 with Adj. EBITDA growth partially offset by higher maintenance and corporate capex and lease liability payments
• ROIC stable at 14.5% reflecting portfolio free cash flow growth offset by recent acquisition and growth investments
Adj. EBITDA(1) Portfolio free cash flow(2) ROIC(3)
• Highlights growth and operational
performance of our business
• Measures the unlevered free cash flow
generation of the existing site portfolio
• Highlights asset efficiency and
effectiveness of our capital allocation
Three measures that capture the fast growth, cash generation and efficient capital allocation of our business
5
51
97
133
169 173
2016 2017 2018 2019 2020 LQA
5.7%
9.4%
12.1%
14.4% 14.5%
2016 2017 2018 2019 2020 LQA
(1) Management defines Adjusted EBITDA as loss before tax for the period, adjusted for finance costs, gain or losses on financial instruments, interest receivable, loss on disposal of property, plant and equipment, amortisation of
intangible assets, depreciation and impairment 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.
(2) Portfolio Free Cash Flow is defined as Adj. EBITDA less payment of lease liabilities, tax paid and maintenance and corporate capital additions.
(3) ROIC is defined as portfolio free cash flow divided by Invested capital. Invested capital is defined as gross plant, property and equipment and gross intangibles, less accumulated maintenance and corporate capital expenditure.
A reconciliation is available within the appendix.
(4) LQA is calculated as the most recently reported fiscal quarter (Q2 20) multiplied by four.
(4) (4) (4)
Resilient business model demonstrates minimal impact of COVID-19 to both operations and financials
Commentary Impact Assessment Change since Q1 20
Workforce & Operations
• Field operations and home working
continues• Minimal • None
Existing Revenue / Liquidity
• $2.8bn contracted revenues with 6.8
years average contract life remaining
and significant liquidity ($213m cash as
at Q2 20 and up to $290m of undrawn
debt(1))
• Minimal • Increased liquidity
Customer roll-out
• Implications for tenancy roll out if
customers have supply chain delays
• Some customer rollout delays
• Continue to expect 1k – 1.5k
tenancies in 2020
• Strong pipeline, however majority
of rollout expected towards the
end of the year
Supply Chain
• Forward purchasing of capex and opex • Minimal • None
Situation management
• Regular Board monitoring and video
conference / cloud systems• Minimal • None
6Helios Towers plc
(1) Reflects term loan facility of up to $200m, RCF of $70m and South African facilities of $20m (ZAR 351 available and a Q2 20 closing Fx rate of 17.3279).
Full year guidance maintained
7
Sustainable business strategy roadmap
Helios Towers plc
Develop core focus of our strategy✓
Q420 Sustainable business strategy presentation to stakeholders
Q121 Launch Sustainable Business Report
Q320 Develop strategic KPIs and targetsLaunch sustainability strategy internally and externally
Contribution against
UN Sustainable Development
Goals
Business excellence and efficiency1
Network access and sustainable development
2
Empowered people and partnerships3
Underpinned by strong governance and values
Recent Developments
8Helios Towers plc
(1) Tanzania subscriber movement reflects Vodacom disclosed information for the quarter ended 30 June 2020. DRC subscriber movement reflects weighted average Vodacom and Orange reported KPI information for the quarter
ended 30 June 2020.
Delivered power uptime of 99.99% in Q2 20 across our markets, achieving record power uptime in June 2020.
Demonstrates continuous improvement ethos across
the business and operational resilience against COVID-19.
Operational excellence
in our markets
On August 12 signed agreement to purchase 1,220 towers from Free
Senegal with a commitment of 400 BTS over the next five
years
This acquisition is a meaningful milestone against
our strategic ambition and enters us into a compelling market for telecoms with its combination of a young, growing and increasingly urbanised population plus
high GDP growth.
Tower portfolio acquisition
from Free Senegal
Effective July 1 2020 the 25% listing requirement no longer
includes companies who hold “network facility
licences for leases of towers” (finance act 2000).
As a consequence Helios Towers Tanzania is no longer required to list on the Dar es
Salaam Stock Exchange.
Tanzania listing
requirement
On August 13 announced the appointment of Carole
Wamuyu Wainaina as a Non-Executive Director with
immediate effect.
Follows the appointment of Sally Ashford as a Non-
Executive Director on June 15.
Improved
Governance
Senegal expansion
Summary
10Helios Towers plc
Executing on our inorganic growth strategy with
material acquisition in new market, Senegal
Acquisition meets all of our investment criteria and
marks significant progress against our 2025 strategic
ambitions
Acquisition provides further revenue diversification
and increases % Group revenues in hard currency
Closing expected by Q1 2021 and is expected to
be immediately accretive to earnings
Transaction highlights
11Helios Towers plc
In line with the Group’s stated ambition of growing through strategic acquisitions
Assumes EUR / USD rate of 1.18.
TRANSACTION
OVERVIEW
Signed agreement to acquire passive infrastructure assets from Free Senegal for an upfront cash consideration of €160m ($189m). Represents an enterprise value of €178m ($210m) including an estimated €18m ($21m) of taxes and capitalised ground leases.
In addition, deferred consideration and growth capex of €40m ($47m) and c.€30m ($35m) respectively are expected to be invested over the next 5 years in relation to the rollout of 400 committed new build-to-suit sites.
SITES AND
TENANCIES
1,220 sites expected upon closing and 400 build-to-suit sites committed to be rolled out over the next five years, with a service agreement of 15 years entered into with Free Senegal for our provision of hosting and energy services on these sites.
FINANCIALSAssets are expected to initially deliver run-rate revenues of €32m ($38m) and run-rate Adjusted EBITDA of €16m ($19m).
FINANCING Intend to finance transaction with cash on balance sheet and existing debt facilities.
CLOSINGExpect to close by Q1 2021, subject to customary completion conditions and regulatory approval with a 100 day set-up plan in motion.
FREE SENEGAL
OVERVIEW
The seller, Free Senegal, are the second largest operator in Senegal with growing market share (26% in 2019) and are backed by a consortium of investors including NJJ, the founder of the Iliad S.A. group Xavier Niel’s private holding company, Teyliom Group and Axian Group.
Helios Towers Acquisition Criteria Senegal Acquisition
Emerging market ✓ 5% GDP CAGR forecast (2019 – 2022)
Population of >10m ✓ Population of 16m with 3% annual growth forecast to 2022
3+ Operators ✓ 3 Operators: Free, Orange (Sonatel) and Expresso
Possibility to achieve #1 or #2 market share ✓ No other independent towerco operates in Senegal
Stable and / or pegged currencies ✓CFA Franc is pegged to the Euro, with low inflation (ranging
from 0.2% to 1.5% over the last five years)
Power and tower infrastructure gap ✓ Subs / PoS of 4,599 compared to c.1,100 in the U.S.
High subscriber growth and low mobile
penetration ✓Mobile penetration low at 52% and 4% CAGR mobile
subscription growth expected (2019 – 2022)
Enhances Group’s returns ✓ Accretive to Group returns
Senegal meets all of our target market criteria
12Helios Towers plc
€
#1
Orange
Sources: IMF, World Bank, Company estimates, GSMA Intelligence TowerXchange and BMI research.
5
8 +
Q2 20 Q2 20 PF 5YR Vision
Acquisition supports our 5-year vision
13
Sites
Markets
6
Strong progress against our 5-year vision
• The acquisition would represent a meaningful
milestone towards HT’s 5-year vision, and is wholly
aligned with the Company’s core strategy.
Markets
• The acquisition enables HT to enter a new market,
bringing us closer to our target of 8 markets plus in the
next 5 years.
Sites
• The sites consolidated on Day 1 of the acquisition
amount to 25% of HT’s total targeted site expansion as
outlined in the Company’s 5-year vision.
• Including Free’s 400 pre-committed sites (to be rolled
out over the next 5 years), the total portfolio would
represent 33% of HT’s 5-year site expansion target.
Helios Towers plc
7,092
8,312 day 1 /
8,712 incl. committed BTS
12,000 +
Q2 20 Q2 20 PF 5YR Vision
Strong portfolio characteristicsSecond largest portfolio of telecom sites in Senegal
14
Initial sites andtenancy ratio
1,220 sites
1.0x tenancy ratio
53%47%
Greenfield Rooftop
Site Typology Site location
70%
30%
Urban Rural
Committed sites (over next five years)
+400 (c.80 per annum)
Helios Towers plc
Asset characteristics
Assumes EUR / USD rate of 1.18.
Revenue run-rate (excl. BTS commitment)
€32m
($38m)
Adj. EBITDA run-rate(excl. BTS commitment)
€16m
($19m)
103 103
99 99
28 2811 11
c.19
Q2 20 LQA Q2 20 LQA PF
168 168
172 172
42 42 25 25
2 2 c.38
Q2 20 LQA Q2 20 LQA PF
3,668 3,668
1,867 1,867
970 970 415
415
172
172
Day 1:
1,220
Committed BTS:
400
Q2 20 Q2 20 PF
Helios Towers pro forma characteristics
15Helios Towers plc
Sites Revenues (US$m) Adjusted EBITDA (US$m)
8,312 day 1 /
8,712 incl. committed BTS7,092 c.447409 c.239220
• Acquisition of sites from Free Senegal increases site count by 17% (23% including 400 committed BTS), pro forma revenues by 9%, and Adjusted EBITDA by 9%
Tanzania GhanaDRC Congo B South Africa Senegal(1)
(1) Using a EUR/USD rate of 1.18.
55%
4%
20%
21%
28%
22%18%
13%
5%14%
26%
20%
16%
12%
8%
4%13%
Acquisition provides further revenue diversification
and increases % revenues in hard currency
16Helios Towers plc
H1 20 reported H1 20 pro forma
• Acquisition provides further customers diversification, with no single customer representing more than 26% revenues
• 63% of H1 20 pro forma revenues in hard currency
50%
13%
18%
19%
REVENUE BY
CUSTOMER
REVENUE BY
CURRENCY
Vodacom
Airtel
Tigo
Orange
Free
MTN
Other
USD
Euro-Pegged
Power Local
Currency
Local Currency
59% hard
currency
63% hard
currency
Financial results
H1 2020: Continued strong financial and operational performance
(1) Management defines Adjusted EBITDA as loss before tax for the period, adjusted for finance costs, gains and loss on financial instruments, interest receivable, loss on disposal of property, plant and equipment, amortisation of intangible
assets, depreciation and impairment of property, plant and equipment, depreciation of right-of-use assets, deal costs for aborted acquisitions, deal costs not capitalised, share-based payments and long-term incentive plan charges,
and other adjusting items. Adjusting items are material items that are considered one-off by management by virtue of their size and/or incidence.
(2) LQA Adj. EBITDA calculated as per the bond definition as the most recent fiscal quarter multiplied by 4. This is not a forecast of future results.
(3) Includes standard and amendment colocations.
(4) Net debt is calculated as our gross debt less cash and cash equivalents.
(5) Calculated as net debt divided by last quarter annualised Adj. EBITDA.
QoQ YoY
In US$m, unless otherwise stated
Q1 20 Q2 20 % change H1 19 H1 20 % change
Revenue 102 102 0% 191 204 7%
Adj. EBITDA (1) 54 55 2% 99 109 10%
LQA Adj. EBITDA (2) 216 220 2% 201 220 10%
Adj. EBITDA margin (%) 53% 54% +1ppt 52% 53% +1ppt
Sites (#) 6,991 7,092 1% 6,882 7,092 3%
Colocations (#) (3) 7,686 7,814 2% 7,218 7,814 8%
Tenancies (#) 14,677 14,906 2% 14,100 14,906 6%
Tenancy ratio (x) 2.10x 2.10x - 2.05x 2.10x 0.05x
Capex 11 27 140% 55 38 -31%
Net debt (4) 653 656 0% 716 656 -8%
Net leverage (x) (5) 3.0x 3.0x - 3.6x 3.0x -0.6x
18Helios Towers plc
Solid growth in sites and tenancies
• Tenancy growth of 6% YoY (2% QoQ), reaching 14,906 tenancies in Q2 20
• QoQ growth driven by Eagle acquisition in South Africa (83 tenancies), Congo B acquisition (37 tenancies) and steady organic
tenancy additions in all markets
• Tenancy ratio of 2.10x increased +0.05x YoY and flat QoQ
3,650 3,667 3,668
1,817 1,853 1,867
933 964 970381 384 415101 123 172
6,882 6,991 7,092
Q2 19 Q1 20 Q2 20
Evolution of sites portfolio Evolution of tenants
7,950 8,120 8,131
3,705 3,883 3,944
1,744 1,891 1,905533 565 606168
21832014,100 14,677 14,906
Q2 19 Q1 20 Q2 20
+6%
2.05x2.10x 2.10x
Q2 19 Q1 20 Q2 20
+3%
Evolution of tenancy ratio
+0.05x
Tanzania DRC Congo BrazzavilleGhana South Africa
+2%+1%
19Helios Towers plc
Q2 2020: Ongoing EBITDA and margin progression
• Q2 20 revenue increased 5% YoY to $102m, driven by growth in all OpCos. QoQ revenues stable, with majority of new tenancy additions arriving at the end of the quarter
• Adj. EBITDA grew 10% YoY to $55m (2% QoQ), driven by revenue growth and a reduction in operating expenses
• Adj. EBITDA margin at 54%, increasing 2ppt YoY and 1ppt QoQ
97 102 102
Q2 19 Q1 20 Q2 20
Revenue Adj. EBITDA
+10%
52% 53% 54%
Q2 19 Q1 20 Q2 20
+5%
Adj. EBITDA margin
+2 ppt
50 54 55
Q2 19 Q1 20 Q2 20
+2%0% +1 ppt
20Helios Towers plc
Tanzania
41%
DRC
42%
Congo B
6%
Ghana
11%
South Africa
1%
USD
55%
XAF/EUR
4%
LCY (Power)
20%
LCY (CPI) 21%
Africa’s Big 5
MNOs(1)
86%
Other
14%
Consistent and strong currency protection and blue-chip customer base
• High quality contracts with inflation and power price escalators
and 59% of revenue pegged to hard currencies
• Long-term relationships with Africa’s Big-Five MNOs, who
generated 86% of H1 20 revenues
• 82% of future contracted revenues with Africa’s Big-Five MNOs(1)
• Diversified business and strong currency protection provides
resilience against macro impact during COVID-19
H1 2020 revenue breakdown by customer H1 2020 revenue breakdown by FX
H1 2020 revenue breakdown by operating company Commentary
(1) Big-Five MNOs defined as: Airtel, MTN, Orange, Tigo and Vodafone/Vodacom.
21Helios Towers plc
24%
18%
10%8%3%
37%
DRC
Tanzania
Ghana
Congo B
South Africa
HoldCo
H1 2020: Cost and tower cash flow analysis
38 39 39 36 35 34
31 32 34 34
32 33 34 33
46% 45% 45%40% 40% 38% 35% 35% 36% 35% 33% 33% 33% 32%
Q1
17
Q2
17
Q3
17
Q4
17
Q1
18
Q2
18
Q3
18
Q4
18
Q1
19
Q2
19
Q3
19
Q4
19
Q1
20
Q2
20
Quarterly operating cost breakdown(1)
H1 20 SG&A: $28m• Strong YoY growth in tower cash flow driving
Adj. EBITDA margin growth
• Q2 20 opex decreased $1m YoY to $33m, reaching a
record low of 32% as a % of revenue
• H1 20 SG&A of $28m increased $5m YoY primarily due to
Plc related expenses, South Africa introduction and
Congo B licence fee(3)
Adjusted monthly gross profit per tower ($) (2)
Commentary
3,069
3,273
Q2 19 Q2 20
+7%
Opex (US$m) Opex (% of revenue)
(1) Cost breakdown excludes depreciation, amortisation, exceptional items, deal costs and share-based payments and long-term incentive plan charges.
(2) Adjusted monthly gross profit calculated as reported gross profit + site depreciation divided by average sites.
(3) Licence fee of 3% of revenue in Congo B, introduced for FY 20.
22Helios Towers plc
H1 20 opex: $67m
11 7
110
1 1
30
19
5
57
15
26
10
114
38
110 -140
FY 19 H1 20 FY 20
Organic
Capex
FY 20
Potential
Acquisition
Capex
FY 20
Group
Total
Maintenance Corporate Upgrade Growth Acquistions
Capital expenditure – tightly controlled and
carefully applied for growth
FY 20 capex guidance maintained at $110-$140m
Approximately $110m for organic investments, of
which $20-25m maintenance and corporate
capex expected
$30m for potential acquisitions for opportunities in
existing markets, of which $10m was deployed in
Q2 20 relating to the Eagle acquisition
CommentaryCapex breakdown ($m)
$20-25m
maintenance
and corporate
capex
23Helios Towers plc
Summary of financial debtDebt KPIs Gross and net leverage
Commentary
Successfully completed refinance with US$750m senior notes due 2025
with 7.00% coupon alongside new US$70m RCF and term loan of up to
US$200m
As a result, extended maturities, reduced cost of debt and increased
available capital for expansion
Q2 20 net leverage(5) of 3.0x below target range of 3.5x and 4.5x:
significant capacity for additional debt
Monthly shareholder loan payments by operating companies to Group
treasury uninterrupted through COVID
($m) FY 19 Q4 19 Q1 20 Q2 20
Cash & cash equivalents 221 221 146 213
Less: restricted cash(1) 38 38 - -
Cash excl. restricted cash 183 183 146 213
Bond 600 600 600 750
Term loan 75 75 75 -
Lease obligations + other(2) 135 135 126 118
Gross debt 810 810 800 868
Net debt (3) 627 627 653 656
Annualised Adj. EBITDA 205 215(4) 216(4) 220(4)
Gross leverage(5) 3.9x 3.8x 3.7x 3.9x
Net leverage(6) 3.1x 2.9x 3.0x 3.0x
3.9x 3.8x 3.7x 3.9x3.1x 2.9x 3.0x 3.0x
FY 19 Q4 19 Q1 20 Q2 20
Gross leverage Net leverage
0.0x / -0.1x
(3)
(1) Restricted cash reflects cash held for the payment of change of control taxes related to our initial public offering in 2019, funded by a capital contribution from our shareholders immediately prior to the initial public offering.
(2) ‘Other’ relates to unamortised loan issue costs, accrued bond and loan interest, derivative liability and shareholder loans.
(3) Net debt is calculated as our gross debt less cash and cash equivalents. Q4 19 net debt excludes US$37.7m of restricted cash for the payment of change of control taxes related to our initial public offering in 2019, funded by a capital
contribution from our pre-IPO shareholders immediately prior to the initial public offering.
(4) Annualised Adj. EBITDA calculated as per the bond definition as the most recent fiscal quarter multiplied by 4. This is not a forecast of future result.
(5) Calculated as gross debt divided by annualised Adj. EBITDA for the quarter and Adj. EBITDA for the year.
(6) Calculated as net debt divided by annualised Adj. EBITDA for the quarter and Adj. EBITDA for the year.
24Helios Towers plc
Strong growth in portfolio free cash flow generation and
improved receivables days($m) 2017 2018 2019 H1 20
Adj. EBITDA 146 178 205 109
Non-discretionary capex(1), leases(2) & taxes (49) (45) (36) (20)
Portfolio free cash flow 97 133 169 89
Cash conversion % (3) 66% 75% 82% 82%
Net payment of interest (4) (41) (62) (68) (51)
Levered portfolio free cash flow 56 71 101 38
Discretionary capex (5) (149) (103) (102) (31)
Adjusted free cash flow (93) (32) (1) 7
Net change working capital (6) (23) 10 (45) (22)
Cash paid for exceptional and EBITDA adjusting items
and proceeds on disposal of assets (7)(7) (32) (36) (8)
Cash paid in related to change of control taxes (8) - - - (38)
Vodacom minority acquisition (59) - - -
Free cash flow (182) (54) (82) (60)
Net cash flow from financing activities 168 25 214 53
Net cash flow (14) (29) 133 (7)
Cash brought forward (8) 134 120 89 221
FX 0 (1) 0 (1)
Cash carried forward 120 89 221 213
(1) Non-discretionary capex includes maintenance and corporate capital additions.(2) Payment of lease liabilities includes interest and principal repayments of lease liabilities.(3) Cash conversion % is calculated as portfolio free cash flow divided by Adjusted EBITDA.(4) Net payment of interest corresponds to the net of “Interest paid” (including withholding tax) and “Interest received” in the condensed
consolidated statement of cash flows, excluding interest payments on lease liabilities.(5) Discretionary capex includes acquisition, growth and upgrade capital additions.(6) Net change in working capital corresponds to movements in working capital, excluding cash paid for exceptional and EBITDA adjusting
items and including movements in capital expenditure related working capital.(7) Cash paid for exceptional and EBITDA adjusting items includes cash paid for exceptional project costs, deal costs, litigation costs, share-
based payments and long term incentive plan charges and associated costs.(8) Opening cash balance in Q1 20 included $37.7m of restricted cash, which had been funded at the time of IPO by Helios Towers’ pre-IPO
shareholders. This was paid to the relevant tax authority in Q1 2020.(9) Net receivables equals total trade receivables (including related parties) and accrued revenue, less amounts billed not yet due.(10) Net receivables days calculated as net receivables divided by revenue reported in the period multiplied by number of days in the period.
Strong portfolio free cash flow conversion
Net receivables(9)
25Helios Towers plc
31
8
39 37
16
17
169
1
5
5
5
20
40
60
20
40
60
FY 17 FY 18 FY 19 H1 20
Ne
t re
ce
iva
ble
s
da
ys(1
0)
Ne
t b
illin
g (
US$
m)
Big-five MNOs Other MNOs Other Net receivables days
66% 75% 82% 82%
FY 17 FY 18 FY 19 H1 20
H1 2020 summary
Delivering on our acquisition growth strategy
Strong operational performance in H1 2020
Significantly improved balance sheet, with
extended maturities, lower cost of debt and
additional capital for expansion
Organic and inorganic pipeline robust
FY 20 guidance maintained
26Helios Towers plc
Q&A
Disclaimer
This presentation does not constitute an offering of securities or otherwise constitute 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 presentation 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 these forward-looking
statements, 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 presentation 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 presentation 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.
28Helios Towers plc
Appendix
Helios Towers market overview
Big-5 MNOs
HT Market
Share(3)Airtel MTN Orange Tigo Voda
Mobile
Penetration(2)
Towers
Available(3)
PoS
Additions(3)
(2018 – 2024)
PoS Growth
CAGR(3)
(2018 – 2024)
Tanzania 64% 41% 2k 5.1k 6.1%
DRC 63% 38% 1k 3.8k 9.0%
Ghana 21% (1)
(1)
55% 0.8k 2.7k 5.1%
Senegal 30%(6) 52% 3k(6) 1.7k(6,7) 7.2%(6,7)
Congo B 53%(4) 47% 0.3k(4) 0.4k 5.2%
South Africa n.m.(5) 67% 25k 7k 3.3%
Group 50% 32k 21k 5.0%
1. AirtelTigo is a 50:50 joint venture between Airtel and Tigo.
2. GSMA Intelligence Database. Unique mobile subscribers 2019.
3. Hardiman Report, August 2019.
4. Estimated market share and site count based on Hardiman Report, August 2019 and adjusted for recent Congo B acquisition.
5. Entered South Africa in early 2019.
6. TowerXchange / Company / BMI research / HT estimates
7. 2020 – 2025 Company estimates
30Helios Towers plc
Summary Income Statement
31Helios Towers plc
6 months ended 30 June 3 months ended 30 June2020
US$m
2019
US$m
2020
US$m
2019
US$m
Revenue 204.0 190.7 102.2 97.0
Cost of sales (130.2) (132.7) (65.2) (67.4)
Gross profit 73.8 58.0 37.0 29.6
Administrative expenses (43.2) (40.0) (19.1) (23.6)
Loss on disposal of property, plant and equipment (1.3) (5.3) (0.7) (0.2)
Operating profit 29.3 12.7 17.2 5.8
Interest receivable 0.5 0.7 - 0.6
(Loss)/gain on financial instruments (35.0) 24.3 6.0 8.5
Finance costs (77.8) (56.4) (48.7) (24.9)
Loss before tax (83.0) (18.7) (25.5) (10.0)
Tax expenses (7.8) (3.8) (3.8) (3.1)
Loss after tax (90.8) (22.5) (29.3) (13.1)
Adjusted EBITDA 109.1 99.0 55.1 50.2
Adjustments applied in arriving at Adjusted EBITDA:
Adjusting items:
Project costs1 (4.6) (3.1) (0.3) (3.1)
Deal costs2 (0.8) (2.4) (0.1) (1.2)
Share-based payments and long term incentive plans3 (0.4) (1.7) (0.2) (1.7)
Loss on disposals of assets (1.3) (5.3) (0.7) (0.2)
Gain or loss on financial instruments (note 16) (35.0) 24.3 6.0 8.5
Depreciation of property, plant and equipment (63.7) (65.2) (32.1) (33.4)
Depreciation of right-of-use assets (4.8) (3.9) (2.5) (2.0)
Amortisation of intangibles (4.2) (4.7) (2.0) (2.8)
Investment income 0.5 0.7 - 0.6
Finance costs (77.8) (56.4) (48.7) (24.9)
Loss before tax (83.0) (18.7) (25.5) (10.0)
1 Project costs in 2020 relate to the preparation for a debt refinancing and listing of equity on London Stock Exchange in 2019.
2 Deal costs comprise deal costs for aborted acquisitions, which mainly comprise professional fees and travel costs incurred while investigating potential site acquisitions that are expensed when the potential site acquisition does not proceed, and deal costs not
capitalized, which relate to the exploration of investment opportunities across Africa.
3 Share-based payments and long-term incentive plan charges and associated costs.
Summary Balance Sheet
32Helios Towers plc
30 June 2020
US$m
31 December 2019
US$m
Non-current assets
Intangible assets 21.3 28.4
Property, plant and equipment 600.3 631.9
Right-of-use assets 109.4 108.2
Derivative financial assets 5.3 41.0
736.3 809.5
Current assets
Inventories 9.1 9.3
Trade and other receivables 164.8 166.5
Prepayments 31.1 14.1
Cash and cash equivalents 212.5 221.1
417.5 411.0
Total assets 1,153.8 1,220.5
Equity
Issued capital and reserves
Share capital 12.8 12.8
Stated capital 12.8 12.8
Other reserves (87.0) (87.0)
Translation reserve (86.5) (82.7)
Share based payment reserve 18.4 19.6
Treasury shares (2.8) (4.4)
Retained earnings 226.5 317.6
Equity attributable to owners 81.4 175.9
Non-controlling interest (0.4) (0.6)
Total equity 81.0 175.3
Non-current liabilities
Loans 738.9 665.1
Long-term lease liabilities 106.2 104.2
Contingent consideration - 5.9
Deferred tax liabilities 3.3 3.1
848.4 778.3
Current liabilities
Trade and other payables 194.9 222.7
Contingent consideration 6.4 3.6
Loans 2.0 19.2
Short-term lease liabilities 21.1 21.4
224.4 266.9
Total liabilities 1,072.8 1,045.2
Total equity and liabilities 1,153.8 1,220.5
Summary Management Cash Flow
33Helios Towers plc
6 months ended 30 June 3 months ended 30 June
(US$m) 2020 2019 2020 2019
Adjusted EBITDA 109.1 99.0 55.1 50.2
Less:
Maintenance and corporate capital expenditure (7.4) (7.8) (4.8) (3.4)
Payments of lease liabilities1 (11.3) (10.2) (6.3) (6.5)
Tax paid2 (1.3) (1.2) (0.8) (0.9)
Portfolio free cash flow3 89.1 79.8 43.2 39.4
Cash conversion %4 82% 81% 78% 79%
Net payment of interest5 (51.3) (32.5) (20.2) (2.5)
Levered Portfolio free cash flow 37.8 47.3 23.0 36.9
Discretionary capital expenditure6 (30.6) (47.5) (22.0) (36.1)
Adjusted free cash flow 7.2 (0.2) 1.0 0.8
Net change in working capital7 (21.5) (35.5) 13.2 (8.7)
Cash paid for adjusting and EBITDA adjusting items8 (8.7) (13.2) (1.0) (12.1)
Cash paid in relation to Change of Control Tax9 (37.7) - - -
Proceeds on disposal of assets 0.6 0.1 0.3 0.1
Free cash flow (60.1) (48.8) 13.5 (19.9)
Net cash flow from financing activities10 52.8 50.0 52.8 -
Net cash flow (7.3) 1.2 66.3 (19.9)
Opening cash balance8 221.1 89.0 146.4 109.5
Foreign exchange movement (1.3) (0.4) (0.2) 0.2
Closing cash balance 212.5 89.8 212.5 89.8
1 Payment of lease liabilities includes interest and principal repayments of lease liabilities.
2 Tax paid excludes Change of Control Taxes which are classified separately below.
3 Please refer to reconciliation of cash generated from operating activities to portfolio free cash flow in the Alternative Performance Measures section.
4 Cash conversion % is calculated as portfolio free cash flow divided by Adjusted EBITDA.
5 Net payment of interest corresponds to the net of “Interest paid” (including withholding tax) and “Interest received” in the condensed consolidated statement of cash flows, excluding interest payments on lease liabilities.
6 Discretionary capital additions includes acquisition, growth and upgrade capital additions.
7 Net change in working capital corresponds to movements in working capital, excluding cash paid for EBITDA adjusting items and including movements in capital expenditure related working capital.
8 Cash paid for EBITDA adjusting items corresponds to cash paid in respect of items per note 4 of the condensed consolidated interim financial statements – project costs in relation to the IPO and fees for the preparation of the debt refinancing.
9 Opening cash balance for the period ended 30 June 2020 included US$37.7 million restricted cash which had been funded at the time of IPO by Helios Tower’s pre-IPO shareholders. This was paid to the relevant tax authority in Q1 2020.
10 Net cash flow from financing activities includes borrowing drawdowns, loan issue costs and repayment of loan in the condensed consolidated statement of cash flows.
ROIC breakdown
34Helios Towers plc
US$m 2016 2017 2018 2019 Q2 20(1)
Net property, plant and equipment 655.1 705.7 676.6 631.9 600.3
Accumulated depreciation 272.5 383.0 490.6 597.2 656.3
Less: accumulated maintenance + corporate capital expenditure (113.2) (135.4) (151.8) (163.9) (171.3)
Gross property, plant and equipment (excl. maint & corp capital expenditure) 814.5 953.3 1015.4 1065.2 1085.3
Gross intangibles 76.4 80.2 82.7 109.1 105.8
Total invested capital 890.9 1,033.5 1,098.1 1,174.3 1,191.1
Adjusted EBITDA 105.2 146.0 177.6 205.2 220.4
Less: maintenance and corporate capital expenditure (32.8) (22.2) (16.4) (12.1) (19.2)
Less: payments of lease liabilities (21.1) (25.8) (25.5) (20.9) (25.2)
Less: tax paid (0.6) (1.3) (2.9) (3.3) (3.2)
Portfolio free cash flow(2) 50.7 96.8 132.7 168.9 172.8
Return on invested capital 5.7% 9.4% 12.1% 14.4% 14.5%
1. Q2 20 Adjusted EBITDA, maintenance and corporate capital additions, payments of lease liabilities, tax paid and portfolio free cash flow are annualised and calculated as reported Q2 20 multiplied by four.
2. Portfolio free cash flow calculation may not add up in the table due to rounding differences.
Cost of debt (pre and post refinancing)
Old Debt Structure
New DebtStructure
Bond 600 750
Coupon 9.125% 7.000%
Term Loan 125 200(1)
Rate L+4.20% L+5.50%
RCF 60 70
Rate L+4.00% L+5.25%
Total Financing 785 1,020
Average Cost(2) 8.03% 6.67%
USD Cash interest (currently drawn(3))(4) 58.15 52.50
USD Cash interest (fully drawn)(4) 63.01 68.07
(1) Assumes $150m committed as of 12 August and $50m accordion.
(2) Libor assumed at 0.33%.
(3) Prior debt cost calculated using $600m bond and $75m term loan interest costs and new debt cost calculated using $750m bond only (term loan and RCF being undrawn).
(4) Excluding withholding taxes.
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Guidance for FY 20 is unchanged
Helios Towers plc
Forecast atIPO
Expectationsfor 2020
Variance
Tenancies
• Targeting 1-1.5k over medium term,with rate of tenancies increasing
• Of which, 50% sites, gradually reducing to 25% over medium term
• Targeting 1-1.5k • 40% sites
In-line
Lease rates • USD inflationary growth • USD inflationary growth In-line
Operating expenses • Site opex flat over medium-term • Site opex flat In-line
SG&A • USD inflationary growth • USD inflationary growth In-line
Adj. EBITDA margin• Targeting Adj. EBITDA margin of 55-
60% in the medium term• Expect to be within the range in 2020 In-line
Capex
• Targeting $80 – 90m per year in the medium term
• Additional $20m upgrade capex in 2020
• Targeting $110m organic capex, plus $30m for bolt-on acquisitions
+$0 - $30m potential increase for bolt-on acquisitions
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