CELLNEX: 2Q’20 RESULTS (ANÃLISIS BANCO SABADELL)
2Q'20 vs 2Q'19 ResultsSales: € 365.0 M (+47.2% vs. +46.4% BS(e) and +46.8% consensus);
EBITDA: € 267.0 M (+64.8% vs. +64.2% BS(e) and +63.6% consensus);
Net Profit: € -13.0 M.
1H'20 vs 1H'19 Results
Sales: € 723.0 M (+47.9% vs. +47.4% BS(e) and +47.6% consensus);
EBITDA: € 527.0 M (+64.2% vs. +63.9% BS(e) and +63.6% consensus);
EBIT: € 70.0 M;
Net Profit: € -43.0 M (vs. € 0 M 1H’19).
The results were in line with expectations, with EBITDA growing by +64.8% in 2Q’20 and RLFCF (Recurrent Levered FCF) totalling € 267 M in the 1H’20 (+54% and +6.9% organic vs. 1H’19), which shows the robustness of the business and its high visibility, maintaining the growth rates registered before Covid-19. 2Q’20 sales came in at € 365 M (+47% vs. 46.2% BS(e)), boosted by towers sales (+70% vs. +69% BS(e)) due to the effect from the scope of consolidation and organic growth (+5% in PoPs). 1H’20 Net Profit came in at €-43 M due to a higher level of amortisations (€ 423 M in the 1H’20 vs. € 217 M in the 1H’19), non-recurring costs (€-34 M in the 1H’20 vs. €-15 M in the 1H’19) and higher financial costs (€ 135 M in the 1H’20 vs. €-110 M in the 1H’19).
To include the impact from Arqiva (~5.5 months) and NOS (~3 months), the company has raised its guidance’20 to € 1.16-€-1.18 Bn (around +70% vs. € 1.06-€1.08 Bn previously and vs. € 1.11 Bn BS(e)). Likewise, it expects RLFCF to increase by >70% (vs. >50% previously and vs. +57.5% BS(e)). We recall that our estimates include 2.2 months of Arqiva and 3 months of NOS. If we included 5.5 months of Arqiva, our EBITDA estimate would be € 1.16 Bn (in the low range of the guidance) and RLFCF would increase by +69%.
We do not expect a significant market impact from these positive results (as expected) following the stock’s recent good performance (+49% in absolute terms in 2020 and +70.7% vs. Ibex). The key will lie in the messages that the company may provide in the conference call (22 Jul at 18:30 (CET)) on the pipeline of inorganic operations (the company will provide news shortly) and the possibility of executing a rights issue, as rumoured by the press. We recall that our base-case scenario includes a €~4.6 Bn rights issue (~22% of the market cap), which would give the company financial muscle to carry out transactions totalling € 13 Bn while maintaining its NFD/EBITDA ratio at ~6x.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
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