Helios Towers plc

Good morning everyone and thank you for joining our Q1 2026 earnings call and I extend my sincere thoughts for those of you caught up in the Iranian conflict. We started the year strongly delivering a robust operational and financial performance underpinned by continued structural demand across our markets and the strength of our business model. Today I'll walk you through our highlights and strategic progress before handing over to Manjit for the financials. So joining me today are Manjit Dhillon, our CFO, and Chris Baker-Sands, our head of investor relations. Before we get into the quarter, let me briefly reiterate what makes Helios Towers a compelling investment proposition. We operate a world-class platform where our focus on customer experience excellence underpins everything we do. Today, across our 15,000 sites in nine high-growth markets, we enable connectivity for around 160 million people. And we see that growing to close to 200 million by 2030. Second, we are positioned in a multi-decade growth opportunity. In the next five years alone, data consumption across our market is expected to quadruple, and over the next 25 years, populations in most of our markets are set to double. Third, we have a robust business model, generating long-term, predictable cash flows through contracts with Tier 1 mobile network operators. Our approach to capital allocation remains disciplined and clearly focused. We prioritize organic growth opportunities where we see attractive returns and operate in what we see as a cash compounding sweet spot. Continuing to invest in high return growth while also delivering a robust and progressive distribution program for our shareholders. Returning to today's agenda. I'll begin with the key highlights from the quarter. The mandate will take you through the financial performance in detail before we open up for Q&A. Let's move to the highlights for Q1. This has been a strong start to the year, and it reinforces the strength of our business and the visibility we have into our 2026 outlook. First, structural demand remains very strong. We delivered over 1400 tenancy additions year to date, including 246 new sites and expanded our tenancy ratio to 2.2 supported by an accelerating investment cycle from our customers, which I'll unpack a little more on slide eight. This momentum is also underpinned by our consistent delivery of high quality service and customer experience excellence. which continues to strengthen our customer relationships each and every day. Second, we continue to deliver metronomic financial performance. EBITDA grew 14% year on year to 127 million, with further ROIC expansion to 15%. As expected, Q1 saw some timing related working capital impacts on recurring free cash flow, which we expect to normalize over the course of the year. Third, we have made further capital structure improvements, including reducing net leverage to 3.5, lowering our cost of debt and continuing our share buyback programme. Now turning to guidance, reflecting both our strong Q1 performance and the visibility provided by our pipeline, we are upgrading our expectations for the full year. We now expect 3,000 to 3,500 tenancy additions and increase from our prior guidance alongside higher EBITDA of $515 to $530 million and recurring free cash flow of $215 to $230 million. While we are increasing investment to capture this growth, as reflected in higher discretionary cap bets, our shareholder distribution program remains unchanged at $76 million for FY26. This reflects the strength of our cash flow generation and our continued focus on balancing high return growth investment with an attractive and sustainable shareholder return program. Overall, this performance continues to be underpinned by $5.3 billion worth of contracted future revenue with an average remaining life of 6.7 years. Now, this slide really highlights the consistency and resilience of our model. Over the past decade, we've delivered 24% CAGR in EBITDA, growing through multiple macroeconomic cycles and global events as we are in now. That consistency reflects not only the strength of our contracts and the essential nature of connectivity, but also our operational capability and relentless focus on customer experience excellence, which enable us to consistently deliver world class quality for our customers. And importantly, we continue to see that momentum carry into 2026 with upgraded guidance reflecting both strong delivery and strong outlook. Turning to demand in more detail. We're seeing powerful structural growth drivers across our market with rapidly increasing data consumption and continued population growth. These trends are translating directly into strong growth in both subscribers and data usage, creating significant revenue growth opportunities for mobile operators. In response, our customers are accelerating their investment in network infrastructure, expanding coverage, increasing capacity and rolling out newer technologies such as 4G and 5G. So Helios Towers, This acceleration translates into increasing demand for our infrastructure, both through new site deployments and additional tenancies on existing towers. This is clearly reflected in our strong and growing tenancy pipeline, which underpins our expectation of a record year of tenancy emissions, now guided at 3 to 3,500 for the year. And finally, a reminder of our disciplined and flexible capital allocation framework, which remains unchanged. First, we prioritize optimized organic investments, focusing on high return opportunities that are accretive to ROIC. The pickup in tenancy demand we're seeing today is a good example of this framework in action. We expect to invest over $500 million in organic growth capex over this five-year period, which is forecast to deliver at least 9% EBITDA CAGR between 2025 to 30, with these investments typically generating returns in excess of 30% ROIC on average in each of the past three years. Second, we maintain a strong balance sheet with a clear commitment to operating within our target leverage range of 2.5 to 3.5 and continuing deleveraging as we go forward. We deliver attractive shareholder returns through a combination of buybacks and a growing dividend with 76 million of distributions forecast in FY26 and at least $400 million through this five-year impact 2030 period. This disciplined approach has already driven ROIC expansion of four percentage points over the previous strategic period, 2022 to 2025, taking our ROIC above whack and generating surplus cash flow such that the business is now in that cash compounding sweet spot where we can balance and deliver both high returning organic growth and a robust, resilient and growing shareholder distribution plan. all against the backdrop of decades of growth runway ahead and the team's operational capability to consistently deliver for our customers. Overall, the strength of our platform, the visibility of our growth and our disciplined capital allocation give us clear confidence in delivering attractive cash compounding returns over the long term. And with that, I'll hand over to Manjit for the financials. I look forward to talking with you at the end for the wrap-up and the Q&A.

Thanks, Tom, and hello, everyone. It's great to be speaking with you today. And moving on to slide 11, I'll be going through the financial results in more detail. One of the key parts of today's announcement is that we have upgraded our guidance by 1,000 incremental tendencies, which have been the largest and earliest increase in guidance we've done to date. indicating the real strength of our pipeline. Tom has just gone through the mobile growth drivers and here we're really seeing those structural mobile tailwinds in our market translate into accelerated growth and that is what has enabled us to upgrade our target today. Of the 1000 incremental tenancies we expect 500 being colos, 500 being new sites and now we're targeting a total of 3000 to 3500 tenancies for the year which would be a record for the company. We expect that the new incremental tenancies will be rolled out in the latter part of the year and therefore the incremental in-year EBITDA we expect them to see is roughly around $5 million and as such adjusted EBITDA is upgraded to $515 to $530 million. It's worth noting that the 1000 incremental tenancies will be expected to deliver over $15 million in annual EBITDA in 2027 and growing there on. We've also upgraded our recurring free cash flow to 215 to 230 million which was previously 210 to 225 million again with 5 million in year impact and over 15 million annualised impact. Later I'll go through the capital allocation overview but these tenancies are exactly the types of investment we are constantly looking for and should be deploying capital on as they give fantastic compounding cash returns and drive the business forward. to a plea to the uptick in guidance earlier than normal, which given the broader macro backdrop is really a testament to the market growth we're seeing and demonstrates the confidence we have in our pipeline for the remainder of the year and towards overall achieving our 2030 targets. Now into Q1 results and moving on to slide 12. We set out our tenancy metrics. On the far left hand graph, you can see the strong growth we've achieved in site additions, 4% growth year on year with 576 adders. of which 246 were delivered in Q1. We've achieved record tenancy additions with 3,276 added year on year with 1,406 of those being in Q1 which is a fantastic start to the year and driven by particularly strong growth in BRC, Tanzania and Oman. Given our site and tenancy additions our tenancy ratio is at 2.2 with positive contributions across all of our markets. Now, moving on to slide 13, the growth of our tenancies has driven strong revenue performance, increasing 12% year-on-year to $229 million. We have a strong hard currency profile with 68% of our revenues being in hard currency, which translates to 71% of our adjusted EBITDA being in hard currency. As a reminder, all of our markets are innately hard currency, including Oman, DRC, Senegal and Congo-Brazzaville. These are either dollarized or paid to the euro meaning that the revenues our customers receive are hard currency which is also what they pay to us. In our remaining markets we also have a portion of revenues linked to hard currencies adding further to the overall mix. Our earnings are further protected by contractual protections including power and CPI escalators. The CPI escalators typically escalate in the key one and power price escalators which go up or down depending on local pricing. which escalate either quarterly or annually depending on the contract. Additionally, circa 70% of our revenues come from investment grade customers, with 99% coming from blue chip mobile network operators. Finally, we sign long term agreements with our customer partners with initial terms of 10 to 15 years, and they are largely non-cancelable. Today, our contracted revenue is $5.3 billion and has an average remaining life of 6.7 years, which includes auto renewals, which would increase this further. Ultimately, we have secured a minimum revenue of 5.3 billion without pursuing any new business, providing a strong underlying earnings stream that we layer on top the further growth driven by incremental tenancy rollout. Now, moving on to slide 14, which illustrates the key drivers of revenue and EBITDA growth in more detail. As with previous courses, the key driver of our growth is tenancy additions, with our escalators working effectively to offset macro movements to protect our EBITDA on a dollar basis. 9% revenue growth from tenancy additions predominantly drove overall revenue growth of 12% with the remainder coming through CPI escalators and FX 12% EBITDA growth through tenancy additions mainly drove 14% overall EBITDA growth again with the remainder coming through CPI escalators and FX the CPI escalators kick in in Q1 we do see a small upside now but this will be evened out during the course of the year In short, the key driver of growth is through tenancy additions and operational leverage from LeaseUp and we demonstrate again that the business structure continues to be robust and resilient and operating as designed. Now, moving on to slide 15. We are laser focused on disciplined capital allocation and ensuring we make the best investments possible. Our tightly controlled approach to capital allocation is central to how we operate and our Impact 2030 strategy. Asset out at the capital markets day the most attractive form of capital investment is in investing in organic high returning opportunities i.e. co-locations, opex initiatives and selective new builds. Tom mentioned the blended returns we see on these investments being over 30% return on invested capital and it's crucial we continue to find the best opportunities and allocate capital to those. Therefore, we're very happy with the incremental investment of $70 million to support the rollout of 1000 additional tenancies, which will drive over 15 million recurring EBITDA and recurring free cash flow. This brings the total discretionary capex up to between 180 to 210 million, all whilst importantly, we are continuing with our buyback and dividend program that we previously announced. Again this demonstrates that we are in our cash compounding sweet spot where we see both growth through compounding investment and value through continued and growing shareholder returns. Now to turn to slide 16 and here we provide an overview of our balance sheet and debt maturity which we've managed to strengthen despite the ongoing global volatility. In late March this year we raised $500 million in new 6.75% senior notes. which was used to repay the existing term loan facilities for the new notes maturing in 2031. The refinancing further strengthened our balance sheet extending our average maturity by one year to four years overall and reduced our cost of debt by 40 basis points to 6.7% with no near term maturities until 2027. Additionally we have just raised the 250 million term loan which remains untrawn and was raised to manage the potential convertible bond maturity in March 2027. Through both transactions, we continue to proactively manage the balance sheet and have more than 500 million in cash and owned one debt facilities. So we're in good shape to deliver on our medium term ambitions. Finally, our net leverage continues to decrease, reducing by 0.5 year on year to 3.5 times net leverage. And we should see this come down slightly during the course of the year. Which takes us on to slide 17 and a quick reminder of our upgraded full year 2026 guidance. We're delighted with our performance this quarter, and the upgrade to our 2026 guidance clearly demonstrates the confidence we have in our pipeline for the remainder of the year. Our upgraded tenancy guidance of 3,000 to 3,500 tenancies will represent 9 to 11% year-on-year growth. Our adjusted EBITDA target also increased to 515 to 530 million, a 9 to 13% year-on-year growth. We've raised recurring free cash raise to 215 to 230 million for a 3 to 11% year on year growth. To deliver this, we've also increased our discretionary capex guidance to 180 to 210 million. We're also progressing with our shareholder distributions with no change to the 76 million we've guided to distribute during the course of the year. All in all, a strong start to the year with an exciting pipeline ahead, which points to another fantastic year for Helios Towers. And with that, I'll hand back to Tom to wrap up with the key takeaways.

Thanks, Andrew. So, to close, let me leave you with a few key takeaways. We've delivered a strong start to the year with performance ahead of market expectations, reinforcing confidence in both our outlook and execution. At the core of this is our highly resilient and proven business model, which continues to drive sustained EBITDA growth and ROIC expansion, even against the more volatile macro backdrop. Looking ahead, we have a strong FY26 tenancy pipeline, supporting record tenancy additions, which will translate into continued EBITDA growth and expansion in recurring free cash flow. And importantly, we remain firmly in what we describe as the sweet spot with a capacity to invest in attractive organic growth, delivering compelling returns to shareholders and further strengthening our balance sheet. Overall, the business is performing well, the outlook is strong, and we remain focused on discipline execution and long term value creation. I'll now hand over to the operator and I look forward to the Q&A.