Infrastrutture Wireless Italiane S.p.A.

Good morning, this is the Course Call Conference Operator. Welcome and thank you for joining the INWIT full year 2024 results and strategic update conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Fabio Ruffini, Head of Investor Relations and Corporate Development. Please go ahead, sir.

Good morning, everyone. Thank you for joining us. As usual with me today is Diego Galli, Inuit General Manager, and Emilia Trudu, CFO. Before we begin, please allow me to draw your attention to the Safe Harvest Statement on page 2. And following the brief presentation of the results and the 2025-2030 business plan, we will open the floor to questions. Now, over to you, Gabriele.

Thank you, Fabio. Good morning, everyone. In today's session, we share a solid set of fiscal year 24 results with revenues up by 8%. An updated view of the product context and reference markets, new financial targets to 2030, and an optimized balance sheet. INWIC is about to turn 10 years old, and the industrial logic at its core is confirmed. The tech industry is in a challenging moment, and neutralized players can help, leveraging on sharing economics to deliver investments in digitalization in the most efficient way, creating value for all. INWIC is unique in this regard. Unlike most tower companies, We build towers from the ground up with a true industrial approach, and we have two anchor tenants. As a result, the business model is more efficient and allows for disciplined capital deployment at attractive rates of return. This is evident in the targets we share today. 6% EBITDA growth per annum to 2030 for a 78% margin. Tenancy ratio of 2.6 times. 1.5 billion euro capex of two-digit unlevered IRR. 400 million euro in share buybacks with focus on 2025. 5.2 times leverage by year-end via a 200 million euro special dividend. And more than 1.5 billion euro of residual headroom to add layers of value creation. From an industrial perspective, we see the most compelling opportunities in new towers, both for coverage intensification and the push on co-location. Expansion towards smart infrastructure, like DAS Indoor, IoT, and large connectivity projects. And real estate efficiency, where we will do two main things. Double the current rate of land ownership. and use land at the base of the towers for solar energy production. Actionable industrial areas of value creation, which build on specific track records. Beyond that, keeping a disciplined approach to capital allocation, we see today buying back in with share as a very accretive use of capital. Let us now move to the quarter and fully resolve. I would highlight another strong set of industrial KPIs with more than 900 new sites in the year and 270 in the quarter. Tenancy ratio improving further to an industry-leading level of 2.3. 9% growth in EBITDA with margin going up by 1 percentage point. And leverage stays flat despite the execution of a share buyback and 100 million euro extra dividends. 2024 was very busy from a commercial perspective. We developed further the indoor coverage connectivity market through dust technology in a number of verticals. We added major projects like Rome 5G, Sierra Milano, and the Milan Underground. This resulted in nearly 50% growth in smart infrastructure revenues, and the addition of several iconic locations to our portfolio. We also made progress on the ESG front, further progress, continuing to integrate sustainability in our business. And we were pleased to see that the efforts are recognized by independent experts. In summary, in a context of transition for the industry, INWIT continues to display a resilient growth trajectory and growth the asset base, affirming our leadership. We continue to support clients in their effort to improve the mobile network and stand ready to capture additional growth opportunities. Let us now skip a few pages to slide 11. In this page, we show the industrial and financial progress of Inuit over the past few years. We added almost 300 million euros in revenues, growing high single digits. Marketing construction revenues up more than three times. Cash flow was up in the double digits. Nearly 3,000 new towers, tenancy ratio moving from 1.9 to 2.3, land ownership more than doubled. All of this translated in a growing return on capital employed at nearly 8%. confirming the soundness of Inuit business model with visible impact of our investments already in terms of cash flow generation and return on capital. In the next page, another perspective on our evolution. From a governance perspective, we transition from M&O control to a fully independent company with no ties between shareholders and major clients. Operationally, our ability to roll out new sites went up from a few hundred to nearly a thousand per year. From a commercial perspective, we were awarded important large projects, especially in Milan and Rome, and built a sales force for smart infrastructure assets. From the point of view of the share price, in a challenging context for long-duration assets, and we delivered the best relative total shareholder return since 2021 among listed tower companies in Europe and U.S. Going forward, the plan offers investors a dividend yield of more than 5% today and a 6% CAG of EBITDA after lease until 2030. Let us now move to the context of the 2025-2030 business plan on page 14. The technological context for digital infrastructure assets continues to evolve. Connectivity is more integrated across large areas, venues, transport corridors, and industrial parks. With a blend of technologies, 5G public and private networks, fiber, IoT, Wi-Fi, Other relevant emerging trends include more frequent network sharing among operators, growth in data centers from large hyperscalers to regional nets, both for telco applications including on-the-run and advanced digital services such as Industry 4.0 and AI. Towers are and will remain central in this evolution. Part of the digital ecosystem that goes from passive infrastructure to active small cell, DAS, Wi-Fi, IoT, and edge computing. We do look with interest at these developments, potentially evaluating opportunities where we can have a specific angle and deliver synergies. A few words on the market context on page 15. Here are two main messages. Data traffic in Italy is growing at double digit rates until 2030, or more than 2.5 times from today's level. And in the digital infrastructure, Italy today is lagging behind peers. Connecting the dots, there is need for more investments in the network to close the gap. Mobile network investments cannot be postponed indefinitely. More investments would be an inversion in the trend over the past few years, where operators have been limited by budget constraints. The unsustainable structure of the Italian telco market has facilitated relevant transactions over the past year or so, as we can see in the next page. In 2024, nearly every one of our largest clients went through a transformational event, both in mobile and fixed-service access. While in the short term, this had an impact on the pace of mobile investments, we are going in the direction of an healthier market with stronger operators, lower leverage, and better ability to grow and invest. The key topic for investors in this context is whether there will be 4 to 3 consolidations in Italy. Our view is that this would be neutral to positive for our companies as it would trigger additional investments. Inuit has both a strong market position and a very protective MSA, which are valuable in case of consolidation. Italy is a concentrated market from a tower company perspective, and we are exposed to the incumbent and first challenger. Our locations are the best and difficult to replicate, especially in the context of low EMS limits, a limited permit to be misused. The MSA has a clear all or nothing clause, with limited churn allowed and no clause for price or volume renegotiation. We believe the nothing option is not realistic, as it does not create value for our clients, and the contract is effectively never-ending. There is also an active share in protection, so more frequencies translate into higher revenues. MSAs are complex contracts that involve a significant purchase price in exchange for rights and limitations that go both ways. They are based on a structure of long-term tenure and specific pricing, and all the features of the MSAs are interconnected. Our priority is to continue working with our Anchor clients in the long term and to find the best answers to their needs, leveraging on sharing economics to drive efficiency and value for all the parties involved. In this context, in the context we discussed, INWIT has the strength of the best power assets in Italy and one of the leading portfolios of digital infrastructures. Macro sites with more than 50% market share in city centers, 70% of which are connected with fiber. More than 650 indoor locations covered, as well as 1,000 kilometers of highways and roadways, equipped with more than 10,000 dust remote units and repeaters. Land owned at 14% of total, or more than 20% of raw land sites. With the neutral host model, we serve every MNO and fix for the success player in the market, as well as utility companies with hosting of smart grid gateways, government agencies and police forces, and dozens of location owners in verticals such as hospitality, enterprise, healthcare, retail and banking. Based on the best assets in the market, we plan on growing the business further with three main growth pillars on page 18. starting from Towers, where Inuit aims to affirm its leadership in new builds, both for commitment and future densification needs, and growing co-location for MNOs, field service access, and IoT. In smart infrastructure, the business plan continues the expansion in Dusseldorf, growing key verticals for MNOs and location-honored clients. leverages on a pervasive IoT gateway network offering lower-end connectivity and services. Also, in the context of larger projects similar to Rome 5G or Sierra Milano Exhibition Center. In real estate, we will invest into more than double today's rate of land ownership and also start a new project to produce solar energy used by active equipments on towers taking advantage of specific investments, incentives. Towers are the common denominator of all growth projects, with opportunities to tap into adjacent markets, from active run to edge data center, based on the way the market will develop in the near future. Let us now spend a few words on each of the three areas of growth, starting from Towers. Emilia, up to you.