Helios Towers plc

Welcome everyone to the call. Good morning.

Good afternoon.

Really great to speak to you today. I'm on page two of the slide deck and we'll present to you now our Q3 performance. So with me as always, Manjit Dhillon, our CFO and Chris Baker-Sams, our Head of Strategic Finance and Investor Relations. Moving on now to page five, the key highlights and very I'm pleased to present to you these strong performance and earnings today and I think what we've seen so far this year is continued strength in terms of our organic business and also obviously our inorganic business as well folding in as we go through the year. So year-on-year site count up 24% 18% on tenancy growth and that's 9% and 7% respectively on the organic side already having completed almost 600 new build to suit sites so far this year which is actually our record in the company history and this translates into strong financial performance that we see here 25% on the revenue and 18% on the EBITDA organic being 14% and 10%

Year over year, which we're very, very pleased with.

As we've seen a bit this year, there's been a bit of margin dilution, which continues, is largely driven by a mixture of the acquisitions, which come on board with a lower margin day one, obviously then to build that later, but also some increases in power prices, which actually mean that both our revenues and our OPEC go up. because of the strength of our contracts and the contractual nature we pass a lot of these OPEX increases on the power prices through to our customers so what you're seeing here is a dynamic whereby for a given absolute dollar figure of EBITDA when you have both revenues and OPEX a bit higher the margin naturally or mathematically comes down a bit and that's what you're So what it means is our contracts do work and we are protecting ourselves from the increased power prices, particularly fuel, which is obviously driven largely through the price of oil. Moving on now to Oman, which we announced about 18 months ago. I'm very pleased to say that we received the royal decree for our license a couple of weeks ago. and now are in full closing mode so we expect to close that within the next four to six weeks and really get ourselves ready for a full year next year which is very exciting. Obviously all of the financing is already in place for that. And lastly here we are increasing or tightening upwards our tenancy guidance for the year as you can see we've had a strong year so far and we have a very good pipeline for Q4 and indeed we have a very very strong pipeline building now for next year as well which is setting ourselves up for 2023. So seeing some good demand to be honest from multiple markets and multiple customers which is always good to see. Moving on now to page six and just here we see graphically largely what I've just talked through and really what you can see here is the effects of largely our expansion strategy that we've been doing on geographic expansion over the past couple of years whereby you see the tenancies absolute figures going up, the tenancy ratios they're getting diluted a bit from 2.1 in 2020 to about 1.9 now and that's obviously the impact of the new markets coming on board with the lower tenancy ratio and therefore building up going forward or loading up the underused loads assets going forward which is what we're very much doing on the sales front right now you can see the same dynamic there on the EBITDA absolute EBITDA obviously going up margin dilution a little bit of an impact there as well from the fuel prices or power prices this year and then a similar trend there on the portfolio for cash flow so all very much moving in the right direction aligned with expectations and building ourselves up for future growth here then on page seven a little bit more of a deep dive into the Oman expansion which as I mentioned we've been We've been building now for about 18 months since we announced it last year. The team is very much in place and Philippe Lauridon and Manjit Kula you can see here on the page have been the regional CEO and the MD leading that obviously with support from many others around the group. I was actually in Oman over the past couple of days meeting the team, meeting some key stakeholders there including all of our customers which includes Omontel, Oridu and Vodafone and again we're very much planning for next year now in terms of how we can support the mobile operators in that market achieve even more coverage and capacity requirements obviously with 5G very much on people's mind there That drives the need for significant densification of networks. So we're very much ready for that. And then moving on to page eight, a quick touch here on our sustainability business. And again, a reminder that a few months ago, we were very pleased to be awarded our first ever MSCI rating, which was a triple A. And of course, we're now included in the FTSE for Good index as well. I'm also very very pleased to say that our South African business has achieved the top level there for broad-based black economic empowerment and this reflects our dedication to driving that agenda in South Africa. We recently brought on board a new local investor, Clearwater Capital. and obviously there you can see our South African team. So great work to our South African colleagues there. Now I'll hand over to Manjit to take us through the next section.

Thanks, Tom. Hello everyone. It's great to be speaking with you today. I'll be going through the financial results. And so starting on slide 10, continuing on from what Tom mentioned earlier, despite the broader macro volatility we are seeing across the globe, We've had a strong nine months of the year reflecting continued organic tenancy growth and double-digit organic adjusted EBITDA growth which is all complemented by our acquisitions completed in Madagascar, Malawi and Senegal last year. On this slide you'll see we've summarized the main KPIs which I will be talking through in more detail over the next few slides but in general we're seeing continued financial and operational delivery and good growth across a number of these key metrics. So jumping into the details, moving on to slide 11, our sites and tenancy growth. We've seen strong organic tenancy growth in Q3. From a site perspective, we've seen a 24% increase year on year, reflecting organic growth of 894 sites and 1,213 acquired sites across Madagascar and Malawi. And in fact, we've already added more sites organically this year than we have in any year historically. and that really does reflect the resilient structural growth opportunity across our markets. Year on year we've added 3,140 tenancies which is an 18% increase from Q3 2021. Organically we added 1,448 tenancies and inorganically 1,692. Our tenancy ratio has dropped slightly on a group basis and that is largely driven by the lower tenancy ratio of the acquired sites in Madagascar and Malawi which combined have a tenancy ratio of 1.4 Excluding these acquisitions though our tenancy ratio has slightly decreased by 0.04x year-on-year and that really reflects the strong site growth across our markets which I've just spoken about but ultimately the increased site base is a large base for driving lease up and therefore returns going forward. On to site 12, we've seen continued growth in revenue in EBITDA with 25% revenue growth and 16% EBITDA growth year-on-year, up 15% and 11% organically, respectively. The revenue growth is principally driven by tenancy additions, in addition to CPI and power price escalations, which I'll come on to on the next slide in more detail. Adjusted EBITDA grew by 16% year-on-year, again driven by organic tenancy growth and contributions from our new markets. Our EBITDA margin declined 4 percentage points year-on-year to 49%. The impact is driven by the rising power prices that Tom just mentioned and which I'll come on to on the next slide, but also due to entry into Malawi and Madagascar over the past year. These acquired assets have a combined margin of 30%, reflecting the lower initial tenancy ratios of those assets, which we of course expect margins to expand over the medium term as we lease up and better utilize those tower assets. So moving on to slide 13 and here we set up walkthroughs of our revenue and EBITDA progression for Q3 year-on-year. The first four bars of each bridge, organic tenancy growth, power escalations, CPI escalations and FX all combine to make up organic growth and acquisitions on the far right hand side being the contributions from new markets. Organic tentative growth of 1,448 year on year has really driven 9% of both revenue and EBITDA that you can see on both the bridges. But I want to take a quick minute to focus on escalation movements. As a quick reminder, we have escalators in every customer contract in all of our markets. For power, 50% of our contracts have costly power price escalators and 50% have annual power price escalators. These escalate in relation to the local pricing for fuel and electricity. So if the prices go up, then the escalators go up, and if the prices go down, then the escalators go down. For CPI, we have annual CPI escalators, and they kick in around January. Year on year, we've seen that on average, local fuel prices have increased by 39%. And this is principally driven by DRC, Tanzania, and Ghana, which have accordingly increased revenues of 7%, with some further escalations also expected in Q4. We have a robust business model by design so we've structured the increasing revenues to effectively offset the increased OPEX due to higher power prices to really protect our EBITDA on a dollar basis and on the left hand side you can see that the power revenue of 8 million from revenue falls through to EBITDA at 1 million on the right hand side so from a margin perspective there is some dilution as EBITDA margin on the power price is lower than the overall group margin and in this case diluted margin by two percentage points However, in a year of macro volatility, where we've seen 39% power price increases, we've been able to keep our EBITDA from power flat slash slightly up, meaning that our contracts are escalating effectively and offset the OPEX impact of higher fuel costs. Moving on to CPI and FX, local CPI is currently around 9% across our markets, with revenues up 3% from our CPI escalators. These escalators occur annually and principally in the earlier part of the year so we'll see escalations kick in capturing more of the CPI movement as we go into the new year. But this increase from escalators has broadly offset any FX depreciation which is actually also well managed by the fact we've set up the business such that the majority of our revenue in EBITDA is in hard currency. So whilst we see some FX depreciation in Malawi and Ghana in particular these are currently having a limited impact on the overall group results. We will however see some increased volatility in Ghana in Q4. We do expect there to be a little bit more FX impact as we go into the quarter but overall this is a small part of the overall portfolio and again our CPI status will mitigate this when they kick in in early 2023. But I think both these bridges provide a useful demonstration of the business mechanics and standing back and looking at this from an EBITDA level the key driver of growth is tenancy additions both organically and inorganically. Previously at the Capital Markets Day we showed that however the last six or seven years our EBITDA growth has highly correlated to tenancy growth with little to no correlation to FX or oil prices and this here is a further demonstration of our robust business model and our earnings growth being driven by tenancy additions and being well protected from macro volatility. So with that we move on to slide 14 and here we'll show the usual breakdowns provided which are very consistent from previous updates We have a robust business model underpinned by long-term contracts with diverse customer base and have strong hard-to-earn currency earnings. 98% of our revenue comes from large bleed-chip mobile network operators who are largely investment grade or near investment grade, comprising mainly Airtel Africa, Orange, Axion and Vodacom. Our largest single customer exposure is 28% and that's actually spread across five different markets, so very well diversified. We have strong long-term contracts for our customers and at the end of Q3 we have long-term contracted revenues of $4 billion with an average remaining life of seven years and this is up from $3.7 billion at the end of Q3 2021. This means excluding any new wins or rollout we have that revenue contracted providing a strong underlying earning stream for the business. We also have 62% of our revenues in hard currency being either US dollars or euro pegged. As a reminder this will increase to 67% per the formally announced acquisitions which translates to 72% when looking at it from an adjusted EBITDA perspective. But overall, this provides a fantastic natural FX hedge for the business, again, complemented by our inflation escalators we have in our contracts. Finally, on this slide, I'll just mention that with the new market expansion, we're seeing a more diversified split of revenue per market and pro forma for the acquisitions, no single market will account for more than 32% of revenues. On to slide 15, and here we have a look at CapEx. For the year to date Q3 2022, we have incurred total capex of $214 million, which includes $63 million of acquisition capex, principally related to our entry into Malawi. As mentioned earlier, we are updating our tenancy guidance to the top of the previously communicated range of $1,400 to $1,700. Consequently, we are also updating our organic capex guidance to reflect the increased tenancies and now target a range of £180 million to £200 million of which £152 million has already been spent year to date. Just to be clear, the update here with CAPEX is purely linked to the guided number of tenancies and is really just a function of the costs associated with increased tenancy rollouts. For acquisition CAPEX, the guidance is consistent at $650 million which reflects the acquisitions across Oman and Malawi in addition to some deferred consideration for our Senegal and Madagascar acquisitions and again this remains unchanged. As highlighted in the previous quarter 30% of our 575 million Oman Tiltower acquisition will be funded by our local minority shareholder Rakeza after adjusting for any pro rata local debt that we'll raise. So when we close the deal we see that as a cash inflow into the cash flow statements at year end From a cash perspective, the total outflow of funds for the Iman deal will be less than previously guided. Moving on to slide 16, which shows a summary of our financial debt. Our net leverage at Q3 was 4.1x and continues to be within the medium term range of 3.5 to 4.5. We expect this to tick up to be around the high end of the range as we close the other markets during the course of the year, but expect ample headroom against our financial covenants. As it stands today, we have circa 700 million of available funds, which is sufficient for our announced acquisitions which are due to close and our organic growth for which our established markets are broadly self-financing. But I think we sit here on a very strong balance sheet with long 10-year debt with nearest maturity for group debt not until December 2025. Our drawn debt has an average remaining life of four years. We also have very limited floating exposure with 96% of drawn debt at a fixed rate again giving us good protection against a rising interest rate environment. So overall we're in a great position to say that if we do choose to do any refinancings or financings we'll be doing this for strategic reasons. And finally a quick comment on our market is that six of our markets have either been upgraded or moved to improved outlooks during the last year by one or more credit rating agencies including our two largest markets Tanzania and DRC with Ghana being the only market downgraded. And moving on finally to slide 17 As mentioned earlier, given our robust tenancy growth and pipeline, the pieces say that we've tightened our organic tenancy guidance upwards and the group now targets organic tenancy additions of 1,400 to 1,700 in 2022 from a previous range of 1,200 to 1,700. This implies we'll have one of our best ever years on record in terms of organic tenancy growth and from a financial perspective, our lease rate per tenant is tracking in line with guidance are up 3% year to date and is trending towards the higher end of the range with Q3 2022 lease rates for tenants up by about 5%. Also, as discussed earlier, due to higher power prices, we've also updated our margin guidance for full year 2022 to 50% to 51%. But all in all, we're broadly progressing the plan and expect to deliver one of our best ever years of tenancy growth. And with that, I'll pass back to Tom to wrap up.

Thank you very much Manjit. So I'm on page 18 now and really the key takeaways for me of our performance year to date and you know our outlook for the rest of the year. Tenancy growth clearly being strong and that's continuing literally at this minute with sites being rolled out every day as we speak and again as I mentioned before we are now building the pipeline for next year which is always good to do at this point of the year. I'm very pleased to say that OMAM will be closing in a matter of weeks now, setting us up again for the Enlarged Platform for the full year next year, which is very exciting news. And again, just to reiterate, Outlook next year, definitely building and looking strong across the Enlarged Platform. I think it's worth just reiterating what Manjit went through in terms of the robustness of our business model as well as the structural growth that we clearly have in our markets. I think page 13 really demonstrates how resilient our EBITDA is given the contractual protections that we have in our contracts obviously for inflation, for power prices and for FX. So all in all, pleased with the performance so far this year and looking forward to the months and years ahead. So with that, I'll hand back to Adam, the coordinator, and we'll be open to Q&A. Thank you.

Thank you. And our first question today comes from Jeremy Dulles from Jefferies. Jeremy, please go ahead. Your line is open.

Yes. Good morning. Thank you very much for taking my question. I've got two questions, please. Firstly, when we think about the trajectory of CapEx excluding acquisitions beyond the sort of current year, see the starting point is $180 to $200 million in 2022. As we move forward, obviously it's an enlarged group, but I think you've previously guided that more of the tenancy growth would come from lease ups as we go forwards. So a framework to think about how we should be modeling CapEx into next year, please. And then the second question has to do with DRC. We've obviously read reports of a sort of a taxation dispute between the government and the mobile network operators. Do you clarify for us, please, why that sort of stuff can't happen to Helios? Thank you.

Thanks, Jeremy. Manjit, do you want to take the first one on the CAPEX guidance?

Yeah, sure. Hi, Jerry. So with regard to CAPEX for 2023, we'll give more detailed guidance when we give our next year update, the full year results. But in short, one thing that we set out during the Capital Markets Day is really how you model CAPEX going forward into the medium term. Effectively, as you rightly say, we will be expecting over the next few years that switch from built-to-suits to co-locations. And so we will find there probably being more co-lays than what we found this year, which will subsequently reduce the amount of capex that we'll have. One thing that we just broadly guide towards is including 10k for a co-location, $125,000 for a new site. and then we'll also do incremental spends in terms of project 100 which is the project that we've got to reduce our carbon emissions which will also have a financial benefit we expect that about circa 10 million per annum and then obviously we'll have some incremental upgrade work we'll do on the new acquisitions and we'll announce that in the beginning of every year as well but broadly we expect it to be about 15 to 20 million for 2023. including on top of that we'll have some non-discretionary capex as well which relates to maintenance and corporate and that's typically been around three thousand dollars per site so when you bring all that together we'll be broadly around i'd say the 150 million mark uh if not a bit higher in 2023 but as we go through the medium term you will find it probably bouncing around that number but again we'll give more detailed guidance when we give our full year results all right manager and uh and jerry yeah just on the

on the point around the tax yeah no I mean we've been following that obviously in DRC yeah look I mean you know I guess power codes are generally just simply a lot less relevant and sort of a lot more almost under the radar if you like for you know for authorities and but we very much comply with all of our taxes across the group, always have done, always will do. We have good and open relationships with the tax authorities, that's very much our ethos and we ensure that we pay the taxes as and when they are due. I think we've always Thank you very much.

The next question comes from Alex Roncier from Bank of America. Alex your line is open please go ahead.

Hi guys thank you for taking my question. Just one on maintenance capex if you could maybe come back on why such a strong phasing during the year and the strong ramp up we should expect given the 30 million guidance for the full year and why such a ramp up in Q4 while not More heavenly spread across the year and if we should expect some kind of similar seasonality in the following war years. And then another question just regarding M&A and obviously you've taken a little bit of a step back from the capital market there, obviously focusing on your current geographies and closing the last two deals you've had in the pipe. But I've read across the press that you had Oredo Considering at some point perhaps selling Towers, would you be actually interested in such a big portfolio and changing meaningfully your scale across Middle East? Would that be something? And if not, what would be the impedance to do such a deal? What would be the thing that would stop you for going across or considering even such a deal per se? Thank you.

Thanks very much, Alex. Yeah, maybe I'll just take both of those. The maintenance capex, we obviously give guidance on a yearly basis. As Manjit said, about $3,000 per site per year is the rough guide. Look, it is seasonal. It is a bit lumpy. A lot of the capex is driven as to when generators come to the end of their life and and when batteries come to the end of their life. And so we monitor that obviously constantly. That's part of what our operational teams do. A generator can typically last for anywhere between 20,000 to 40,000 hours and batteries for three to five years. Some of the new lithium ones last 10 or up to 10, which is good. So it's really just due to when our existing fleet of generators and batteries need replacing that's the largest driver for that which does mean that it gets a bit lumpy. What we typically would recommend though is if you want to sort of normalize you maybe take a last 12 months view of it and that's what we that's probably what we'd recommend there just to see a smoothing of it. Yeah on M&A I mean look as We communicated earlier in the year at the Capital Markets Day that we are very much focused right now on integration and really getting the new market up to the high level of business excellence standards as our existing markets and really starting to drive the lease up on the new towers we've acquired and therefore the margins and return. That's very much happening right now and obviously we'll be folding Oman in in the coming weeks as well. and then bedding that down for a bit. As a prominent tower company in the Middle East Africa region, we're always very much aware of all the deals going on really at any given time. We have a business development team whose role it is to look at deals that come through and assess them for reasonableness. or appropriateness or alignment with our strategy and our focus. And that very much continues today as it did a year ago or two years ago. That doesn't stop. Remember, deals of these nature typically take two years or so to come to fruition. So working on a deal today means that something maybe happens End of next year or 2024. But I think in respect to the deal you specifically mentioned, clearly we know about it, everyone does. I think we take a very disciplined approach to assessing individual markets and that's always what we have done and that's always what we will continue to do for all deals including this one. so you know obviously I can't give any some details on that but just really reiterating we take a very disciplined view and we have our acquisition criteria which we which we publish as well and we'll continue to do that but from a strategic point of view still very much focused on integration organic growth getting the lease up going and the new markets you know right now going into going into next year so no change in that respect

Okay and maybe just just one follow-up if I may and because we've had some of your peers perhaps you know taking a step back from you know actively engaging in M&A or even considering M&A given the current you know macro environment but you know that's not really what you're saying you know you're mostly saying you know you continue to assess you know whatever comes you know on the table uh for their own merits and and it's not like given the current rates environment or you know your discussion with banks on financing that you see any Any problem into potentially actually growing the business inorganically?

Well I'm not saying that I'm saying we look at deals that are happening and you know if anything it's always a learning experience right um so um we have a business development team they are doing you know as always a very good job um you know the job of the business development team is not always to Buy everything or win every deal, it's to assess every deal, learn about it and understand whether that could be a good fit for Helios. That very much continues today and I think that's the right thing to do rather than burying our head in the sand and not know what's going on. I very much prefer to know what's going on and then we can make the right decision as and when stuff comes up. Our next question is from Stella Cridge from Barclays. Stella, your line is open, please go ahead.

Thank you. Morning everyone and many thanks for the presentation. I wanted to ask in a couple of areas. The first is, given that a man transaction is likely to close quite soon, how is the funding plan looking for that? Are you close to getting that finalised? And just in terms of split between new borrowing and existing cash usage, how much would you like to keep on the balance sheet in cash? That would be great. The second was just in terms of the move in the net debt quarter and quarter and you know over and above the disclosed items in the release you know was there a working capital outflow for example and they would explain that that increase in that debt and and what would be the outlook for that going into Q4 and that'd be helpful as well thanks.

Thanks I'll take that. So in terms of the funding plan we're still in the process of finalizing that but ultimately We do expect to have a local facility also raised in Oman. We're actually finding in that market at the moment, we can actually get some very, very competitively priced debt along tenure as well. So we'll look to do something there, which will mean that we'll probably raise something in the region of, I'd probably say north of 150 million is what we're looking at at the moment. And that will ultimately reduce the debt that we'll draw from a group perspective. But that will all be confirmed as and when we close that transaction. But again, I think one of the positives here is that when we look to do the financing, we're doing it for a strategic reason. We've got financing in place already so we can really pick and choose which financial facilities that we utilise. all going to PAN in that case. In terms of balance sheet and cash so we'll draw a bit from our cash facilities group for this transaction but again that will be minimized versus the drawdown that we'll take from a local facility plus there are keys for 30% as well so after all of this we still would expect to have cash on balance sheet in excess of 100 million which is normally where we like to be on any given period. On the position around net debt yes it has slightly increased I wouldn't say this is a working capital issue in fact we've actually had a debt of days reduced from Q2 to Q3 we've actually saw a lot of our customers paying so no issues with regards bad debts or anything else like that so working capital is actually very much tightened this is probably more linked to the fact that we've seen a bit of an uptick in terms of capex so investing in the new site builds and we'll see that return coming through over the coming periods that's fantastic many thanks and

I mean since you're planning to keep the 100 million on the balance sheet and perhaps not draw by the sounds of it any of the other loan facilities I just want to ask about the 2025 maturity so it's obviously still a farewell away but I mean just in terms of how you might think about setting yourself up to address that maturity in 2025 I just wonder what were you thinking were you sort of looking to potentially you know accumulate some cash from pre-cash flow or diversify the capital structure Great to just hear some big picture thoughts on that.

Yeah, I think at the moment all options are really on the table. So probably the answer is a bit of both. So a combination of creating some cash up on the balance sheet. But also really at this point, we're under no burning platform to go into a refinancing, as you've also alluded to there. So we'll continue to just sit on the debt packages that we have and we'll continue to monitor the market. It's clearly quite volatile at the moment. So actually being in a position where we have long-tended debt, which is fixed, actually is a bit of an outlier which is a great position to be in so from our perspective we'll wait as we wait the core premium also reduces so we'll drop by a half next summer we'll drop to zero this summer afterwards so we'll just continue to monitor that but we could either look to do a full refinancing in terms of bonds we could look to accrete some cash and pay down a bit and then do a smaller refi but we could also look to utilize the bank markets across multiple markets as well So I think the positive I take away from this is that we've got multiple routes to refis and actually some strategic ones that potentially could continue to reduce our cost of debt potentially if the markets recover slightly.

That's great, many thanks for that answer.

Thanks, Dar. The next question comes from Dimitri Ivanov from Jefferies. Dimitri, your line is open, please go ahead.

Yes, hi, can you hear me? Thank you for the presentation. I have two quick questions. First, on this Ghana situation, I know that this is less than 15% of your EBDA, but I would like to check this deterioration in Ghanaian city, which happened from the end of September. You mentioned that you expect it to be like a small negative effect in Q4 which will be fixed by this CPI escalators from January. I just want to check this if my understanding is correct that this effects weakness is expected just to be cured by this embedded CPI escalation from January. My first question and my second question on funding mix and covenants. So you will use a mix of your existing facilities, if I understood you correctly. You have access to your term loan and RCF for $70 million. But could you remind us about your covenants? You mentioned that you still have a headroom. So on the first one around Ghana, in short, yes, what we'll see is that

With the FX kind of increasing as the years progressed versus when our CPI escalated first kicked in in January, there has been a bit of a widening. What we will find is that when the escalator kicks in again in January 2023, we'll recoup some of that. So in general, we'll be able to get a bit of a protection against the FX piece in Ghana. I'd also add though that in Ghana, the way our structure is set up, there is actually a portion of our revenues linked to US dollars and often received in US dollars. So there's also an added protection against the overall FX movement that we're seeing at the moment. And that's roughly around 20 to 25% of our revenues there. So in addition to the CPI, we also receive a portion of our revenues there in US dollars. In terms of the mix of funding, yes. So we ultimately have at the moment undrawn debt facilities at the group level. We have a 200 million term loan. We have a 70 million RCF. We also have cash on balance sheet in excess of 300 million. And we also have some local funding lines as well. For the funding of Oman, we'll utilize in general a mixture of either the cash on balance sheet plus term loan, either a group or at the local level. So that'll be the way that we'll be financing the transaction. And finally on covenants, we don't provide any covenant disclosure, but what I would say is that when we talk about our target range being three and a half to four and a half, our covenants are in excess of that. And I would say at least a turn in excess of that. In general, we're operating from a covenant perspective in excess of five. So yeah, I think we feel very, very comfortable in that perspective.

Okay, thank you. Thank you very much for the clarification.

Thank you. You're welcome. Thank you. This concludes today's Q&A session. I'll now hand back to Tom for any concluding remarks.

Thank you very much, Adam. And thank you everyone for dialling in today. and thanks for your questions as always if you've got any follow-ups you know where we are so please get in contact and happy to jump on a one-on-one call with people so do let us know and very much look forward to talking to everyone in March when we'll be releasing our full year 2022 as well as providing more guidance for our 2023 year thank you everyone have a good day