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.

Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Graham Hunt from Jefferies. Your line is open. Please go ahead.

yeah thanks very much guys I think I've just got one question which is really obviously I think the start of this year has gone oh you're growing a lot faster than maybe you would have thought when you presented to us in London towards the end of last year at your CMD and you set out this five year plan you've upgraded 2026 guidance but how should we be thinking about the growth of the business beyond 2026 in terms of that run rate now is the business now just growing at a faster rate and a bigger opportunity or is it a bit of a phasing effect pull forward of growth how should we think about that and what are your customers saying to you sort of when you're having conversations with them that reflects that very strong performance here today thanks very much

very pleased with the momentum that we've come on into this year with you know clearly you've seen that in the numbers when we set up our five-year strategy our impact 2030 strategy obviously that is a plan for a five-year period or 20 quarters now quarter one has obviously you know started very well And the prospects for for this year are looking strong hence the the outbreak and we're really really pleased with How we started it and you know as we go through well, we'll be giving more updates to yourself to the market I think that the general environment in the sector at the moment is is strong There's you know accelerating subscriber growth accelerating data consumption growth and what we're seeing therefore is the need to support that through the infrastructure through the proliferation of the networks and the technology upgrades of course this five-year period very much as the 5g cycle for a lot of our market you know that's in very nascent stage at the moment or not even started yet in some but that will be will be coming as well so we're feeling positive and confident about the prospects for the next five years but at this point where we're not changing our kind of long-term side year guidance at this point other than to say you know it's a very good start and we'll be keeping everyone updated as we move forward got it thank you very much thank you as a reminder if you'd like to ask questions please signal by pressing the star one on your telephone keypad

We'll take our next questions from David Wright from Bank of America. Your line is open. Please go ahead.

Yeah, hello, guys. Thanks for taking the questions, and obviously a really strong print there. I think the market is speaking for itself there. I think the former question is probably the key one, which is, you know, is this phasing or a genuine kind of step up? So my sort of second derivative question question to that question is you know you set your um you know your longer term guidance uh the impact guidance um a few months ago with your capital markets day um what what sort of visibility did you have of this quarter's order pipeline that has obviously come in much stronger than you expected plus the guidance raise um and to to the extent that surprised you you know what what were the sort of key regions what I'm trying to just guess is what what's changed him and we obviously see this very healthy African and Middle Eastern environment at least through the numbers we observed from the list of telco operators but what's gap talk what has changed here that has caught you out in a very positive way in just six months time thanks yeah thanks very good so

obviously we talk with all of our customers all the time and there's always discussions and conversations going on in terms of planning both for you know current year but actually also also future years as well I think from a industry and regional perspectives at the moment there's a real you know for more data consumption you know with the use of digital applications everything from social media all the way through to the the banking the AI type services on the phone and smartphones of course are getting way cheaper than they used to be and in a lot of markets now you know you can get certainly 4G enabled smartphones for under $30 5G will uh you know come through on that as well and there's a you know general you know strong good sentiment uh around you know remember uh you know most of our markets are net exporters of commodities so the past few years commodity prices going up uh you know general global demand going up for those types of commodities has has helped that gives extra disposable income in the pockets of millions and millions of people who can therefore afford more data type plans as well. And we're really seeing that coming through. at the moment of course we continue to work with all of our customers and you're absolutely right to say it's generally kind of across the board and you know across all markets I wouldn't sort of pick out you know one market or one customer as the kind of driver of it it's a more general growth dynamic I would say across the region and multi-customer And so, you know, we're very excited about the future I want to give a shout out to all of our teams across the business who are Really, you know stepping up on our focus on excellence or focus on customer engagement and how we deliver that global quality experience across the board at every single one of our sites and As we move forward we're going to be supporting You know both the more coverage in areas that aren't particularly covered today, but of course more capacity needed In areas which maybe are operating for 4g or upgrading to 5g at some point soon and so there's a number of different drivers for the growth and You know, we see this, you know positive momentum as a great start to 2026 You know, and we're very excited about delivering for the rest of this year, but also, you know, of course, the five-year impact 2030 strategic period as well.

Thank you. We are now taking our next questions from Emma Kelly from Morgan Stanley. Your line is open. Please go ahead.

Yes, good morning, everyone, and thank you for taking my questions. and first question I think you just kind of touched on it there and Tom but you know as I think about updating my model for 26 and beyond and are there any markets in particular that are seeing strong growth I think you said it was pretty broad-based but in particular are there any markets beyond the big three of DRC Tanzania and Oman so for example maybe Senegal seeing some outsized growth now And the second question would be on the new site build, I assume you only build when you get expressions of firm interest or commitments from your telco clients. So as you build these new towers, should we think about these new towers starting off with one tenant on board, two tenants on board? How should we think about the ramp up of these new sites? And then just lastly on the CapEx side, and clearly your OPEX and your costs are under firm control have been for the last year, year and a half. But on the CAPEX side, is there any sign of inflation creeping into the cost of building new towers within your footprint? Thank you.

Thank you very much, Enes, for those questions. Maybe I'll take the first one and then Manjit second on the build pursuits and CAPEX one. So the the growth is is generally broad-based You know, obviously as you pointed out, you know The three the three largest markets from an absolute perspective are going to see the you know The largest in terms of absolute terms put on a percentage basis. It's fairly consistent with And certainly over this five-year period, you know, whilst you might see, you know, very busy periods in a quarter or two in a specific market here and there, we wouldn't really pull any out of specific anomalies, you know, either up or down to the general growth. So it is largely across the board and both geographically and customer-wise.

and yeah I'll pick up the dog's feet question so we only ever build a new site once we have an order in place so every site will have a minimum of one tenant on day one but actually if you look at the recent vintages of the builds we've been doing we typically have that increase to two tenants within about two years maybe just two to two and a half years so it's really showing that when we're finding those new sites and we're building for our customers we're building in the right places and finding a very very good service to our customers but also there's a testament to the fact there's a good competitive tension in the markets as well and the customers are all looking to roll out and try and address the real data demand that's coming out of there so certainly with this new amount of builds that we're doing which will be just over a thousand we expect for this year we're really kind of excited about those new locations we think they'll be kind of leasing up fairly quickly as well really in the same kind of speed and trajectory what we've been doing recently and then with regards to cost base and how much the capex is going up for the last few years actually we've been able to keep our capex costs pretty much the same and actually ever since I've run the business our broad-based cost of a built-in suite has been anywhere between $100,000 to $150,000 depending on the location and the type of site and that's still the same case today and we've been able to do that through a couple of factors one it's been due to re-engineering thinking about the site designs really really analyzing it in a very very detailed and methodical manner that's led to improvements in how we build but also just due to the fact that we've been doing more volume and price volume negotiations with our suppliers as well the combination of which has meant that we've been able to keep our costs broadly the same so the expectation is that that will stay the same as well that's great thank you very much both

Thank you. We are now taking our next questions from John Hartes from Deutsche Bank. The line is open. Please go ahead.

Thank you. Good morning. Congrats to the whole team for an excellent quarter. Long may it continue. I only have one question left, and that sort of relates to optics really. I wonder whether you can give any more sort of specific pointers, help, to do with a phasing of the tenancy ads during the year. Could optically, given what Manjit said earlier, the ads in Q2, for example, be down year on year? Because you said many of them will come in through the, at the end of the year or near the end of the year. And then, secondly, just a sort of request, if possible, magic talked about vintages and tenancy ratios and could you please start reporting that information again things like what happens to the tenancy ratio depending on the vintage and what proportion of your towers have one two or three tenants that would be lovely thank you thanks very much John and yeah I think on that last one

Certainly, I think we do show from time to time we can definitely bring that in again For sure, and then on me on the paving in London

yeah so phasing can be lumpy and it can move up and down kind of quarter on quarter so we really look at more on a year-on-year basis what I would say is that the incremental 1000 that we've now guided to that will be at the latter part of the year in the intervening period you should see a pretty consistent rollout in a period on period there of the remainder of that two to two and a half thousand but what I would say is that the pipeline is actually growing we are seeing some really interesting conversations with our customers as well that's ongoing so we continue to monitor that but in short the teams are very very very busy on the ground they're all doing co-locations and new site builds so we will see still a very very quick cadence to new site rollouts and new co-locations as well and yeah to Tom's point absolutely we'll be putting that in in our half year release as well just in terms of the vintages but there's no difference really to what we showed previously we're still seeing that quick lease up on our new site build thank you both very much thank you as a reminder if you would like to ask a question please press star 1 now we'll take our next questions from David Wright from Bank of America your line is open please go ahead

yeah guys hope you don't mind me coming back just a couple of small ones obviously the whole fuel fuel shortage scenario one or two of your markets I know are still a little more reliant on the fuel backup so if you could just give us any indications of just any any sort of pinch points across the businesses and then just on the accounting and the reallocation of central cost into the regions just just trying to understand that is it just to provide a kind of cleaner optic for the management teams there you know when we see this sometimes you know it does tend to preempt some kind of structural shift you put you know the cost into the business when they're those businesses could be coming or going now I don't think that's the case for you guys at all but maybe just if you could give us a little call on that I'd appreciate those two answers thank you so much

Thanks, David. Yes, on the fuel, so obviously very much monitoring the supply chain, no impact from an operational standpoint. We have a very good network of fuel supply and fuel backup across the group, such that we have several months' worth of backups across all markets. I'll just remind everyone again quickly of The power source makeup of a typical 24-hour period across the Henry of power portfolio throughout the 24-hour period get about 17 hours on average from grids across the portfolio and the remaining seven hours is roughly half and half between solar and hybrid and for about three and a half and you know fuel to form generators and about another three and a half so that's the overall mix and as I said from a backup and supply chain perspective we've got several months worth of backups across our markets and so you know as always with Helios Towers focus on customer experience excellence is number one and a big part of that is providing the reliable power and continuing to provide the 99.99% power uptime that we always do. Just on the second point, yeah, no indication at all of

you know markets coming on going that's for sure um yeah I just say this is just about um kind of clean up some extent so we've always done an element of recharges uh we've just done a review and this is now really up by transfer pricing rules so it's just a reallocation of cost and principally because we did a lot of the corporate level for the op codes in terms of helping digitalization and other items like that so it's just making sure that there is a better recharge matrix across the group nothing more than that clear thank you

Thank you. It appears there are no further questions so I will hand you back to the management for any additional or closing remarks. Please go ahead sir.

Well thank you very much everyone for joining us today and of course please feel free to get in contact with us separately if there are any more questions that you want to follow up on. we're really excited about the business we're really excited about delivering both this year and across our impact 2030 strategy and all of the teams and our people our partners are really engaged every single day across the business for our H1 again actually quite a I'll give a quick shout out now we're going to be doing it in person in London and there's going to be a deep dive on the multi-decade growth coming up as well as a glimpse into what future networks will look like it'll be a really interesting one so I really encourage you if possible to come in person that's July the 30th in London otherwise it will be live on the webcam as well so really look forward to seeing as many of you there as possible have a great day everyone and have a great rest of the week talk soon thank you

This concludes today's call. Thank you for your participation. You may now disconnect.