Calnex Solutions plc

Good afternoon, everyone. My name is Juan Gaitán. I'm the next Director of Investor Relations, and I would like to thank you for joining us today for our Q3 2024 Resource Conference call. Today, I'm joined by our CEO, Marco Patuano, and our CFO, Raimond Rias, who will discuss the main highlights of the period, and then we will open the line for your questions. As a reminder, if you wish to ask a question, please press star five on your keyboard. So without further ado, over to you, Marco.

Thank you. Thank you. Good afternoon, everyone. So let me please start providing the main business highlights of the period. Q3 confirms once again our capacity to generate solid results, proving the attractiveness of our business model and the alignment for the achievement of all our public targets. Our commercial performance continues to be consistent, coming hand in hand with robust operational execution. POP are increasing 9.5% compared to last year, 6.3% in terms of equivalent POPs. And our main sources of co-location have been DJ in Portugal and Plus in Poland. In terms of BTS, we see strong progress from Wig and Iliad in France and from Play in Poland. Our organic revenues, excluding the impact from the disposable sites in France during the period and other effects, have been increased by 7.4%. Our organic NBDA after leases increased 9.8%, recurring level free cash flow now reached 1.256 million euros and the free cash flow is 326 million euros. We're on track to meet our short and medium term targets. We recently started our capital market day and it can also assure us that we are fully committed with our objectives and with a consistent delivery quarter after quarter in order to continue building the trust. So let's move to the portfolio optimization and capital allocation priorities. The Irish closing process remains on track and we are expecting to end by the first quarter 2025. On the Austrian deal, we have already obtained all necessary approvals and we will close in a few weeks by mid-December. We are assessing the potential acceleration of shareholder return in 2025 instead of our original plan in 2026, privileging the most critical alternatives and subject to our leverage and rating commitments. We are discussing with rating agencies our degree of flexibility in order to determine the exact timing and size of these distributions. Once again, let me reiterate that we constantly review our market and business line in order to focus on those with the highest strategic fit and return on capital. Selling non-core assets at attractive valuation may result in earlier and larger shareholder distributions. I will later share with you how we see the M&O consolidation in Europe and its impact on Celnex. But before that, I will now hand over to our CFO, Raimon, who will give you more details on the results of the period. Raimon, the floor is yours.

Thank you, Marco. I will now provide a few additional remarks on the period and our financial strategy. This has been another period of consistent commercial performance, with POPs growing at 9.5% compared to the same period last year. Please note that these are physical POPs, which in our view provide a better understanding of the addressable market and our commercial efforts, and which complement our traditional reporting based on equivalent POPs, which show at 6.3% growth. This 9.5% performance is explained by mainly two factors. First, the progress made on our B2S program, which represents around 3% of the total growth and comes primarily from France and Poland. Second, by collocation bots, counting for 6.4% of the total growth. It would be around 3% in terms of equivalent bots. Collocations come mainly from Portugal and Poland, with the rest of our markets showing a steady performance. Revenues increased 7% compared to the same period last year. adjusted EBITDA 6%, and EBITDA after leases 9%. Please bear in mind that year-on-year trends are impacted by the well-known change of perimeter coming from the disposal of sites in France. And excluding those impacts, the pure organic performance would be revenues 7.4%, EBITDA plus 8.8%, and EBITDA after leases almost 10%. EBITDA margin increases, therefore, from 58% to 59%. Moving to slides 10 and 11, we are providing here our organic revenues bridge for the period, as well as individual performance of our different business lines. The 7.4% organic revenue growth can be split as follows. 2.2% from escalators and CPI, 1.5% from collocation, and 3.7% from build-to-sube programs. All our business lines show a solid growth performance. Towers increased 7.2% organically. It will be 6.2% net of the change of perimeter. Fiber and connectivity service is 21% up due to our projects with weeks in France, mostly fiber. That's a negative expense at 13%, and even broadcasting grows at 3%. Moving to slide 12, we illustrate here our commitment to our efficiency programs and our ambition to continue optimizing our cost base. Our lease efficiency program remains on track with implementation of land management measures. in order to absorb both the contractual rent increases and the incremental costs associated with a growing perimeter. Let me also highlight that efforts are being made to further extract efficiencies beyond ground leases through a series of initiatives encompassing all areas of the company. Energy control, discontinuation of non-core activities, deployment of TELNEXT OS to automatize operational processes, new operational models at the country level, and the centralization of the procurement function. In the current presentation, we start to highlight the impact of all those measures on the total headcounts of the company. Starting from the first quarter of 2025, we will report the savings associated with the different improvement areas as anticipated in our Global Efficiency Plan described in the Capital Markets Day. On slide 13, we did dive into the free cash flow, reaching 326 million euros in the period from 436 million last year. The delta is basically explained by two factors. First, the recurrent level of free cash flow that improves by 85 million euros. and second the remedies process in france that contributes 274 million euros less in 2024 versus 2023 our view for the year 24 remains unchanged with free cash flow expected to reach between 250 and 350 million euros compared to the 150 million euros generated in 2023 We expect B2S capex before remedies to be in the 1.3 billion euros area, down from the 1.6 billion euros in 2023. Going forward, our free cash flow generation will significantly increase as we will complete our B2S programs. This will underpin our rapid deleveraging and our capacity to return cash to shareholders. Finally, let's take a look at our debt maturities profile on slide 14. As you can see, there are no maturities left in 2024, and we have used proceeds from our recent bond issuance maturing in 29 with a coupon of 3.6 to 5% in order to repay variable debt maturing in 25 at a 5% cost. Proceeds from additional disposals may be partially used to continue repaying variable debt with a high associated cost, as these instruments are linked to Euribor. We have a robust and well-designed capital structure, which prevents us from incurring higher interest expenses. As you know, 80% of our debt is fixed. Short-term debt maturities have already been managed, so our average cost of debt, which today stands at 2.2%, will only marginally increase in the coming years. As I mentioned earlier, let me now hand over to Marco for his final remarks on value creation opportunities with clients and operational excellence. Thank you.