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Edited Transcript of CLNX.MC earnings conference call or presentation 26-Feb-20 11:30am GMT

Q4 2019 Cellnex Telecom SA Earnings Call

Barcelona Mar 3, 2020 (Thomson StreetEvents) -- Edited Transcript of Cellnex Telecom SA earnings conference call or presentation Wednesday, February 26, 2020 at 11:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Alexandre Mestre Molins

Cellnex Telecom, S.A. - Global Business MD & GM of Global Business

* José Manuel Aisa Mancho

Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director

* Juan Jose Gaitan Mañoso

Cellnex Telecom, S.A. - Head of IR

* Tobias Martinez Gimeno

Cellnex Telecom, S.A. - CEO, MD & Director

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Conference Call Participants

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* Andrew J. Lee

Goldman Sachs Group Inc., Research Division - Equity Analyst

* Emmet Bryan Kelly

Morgan Stanley, Research Division - Head of European Telecoms Research

* Giles Thorne

Jefferies LLC, Research Division - Senior Research Analyst and Technology Research Analyst

* James Edmund Ratzer

New Street Research LLP - Europe Team Head of Communications Services & Analyst

* Luigi Minerva

HSBC, Research Division - Senior Analyst

* Nayab Amjad

Citigroup Inc, Research Division - VP

* Ottavio Adorisio

Societe Generale Cross Asset Research - Equity analyst

* Roshan Vijay Ranjit

Deutsche Bank AG, Research Division - Research Analyst

* Samuel McHugh

Exane BNP Paribas, Research Division - Analyst of Telecom Operators

* Simon Alexander Arulraj Coles

Barclays Bank PLC, Research Division - Research Analyst

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Presentation

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Juan Jose Gaitan Mañoso, Cellnex Telecom, S.A. - Head of IR [1]

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Relations at Cellnex, and I would like to thank you for joining us today for our 2019 results conference call. As always, I'm joined by our CEO, Tobías Martínez; and our CFO, José Manuel Aisa, who will lead the session.

Throughout our prepared remarks, we will refer to the presentation we have released earlier today, and then we'll open the line for a Q&A session with our management team.

So now I'll hand over to Tobías Martínez. Please, Tobías.

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [2]

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Good morning, and thank you so much for your time today. I would like to start sharing with you the main highlights of the year which, as you know, has been a year of transformation for Cellnex.

2019 has been our busiest year so far in terms of growth agreements and capital structure projects in order to make sure we have the capacity to continue executing our strategy. But from the point of view of operations, it has also been marked by a strong organic growth and a solid financial performance. We continued to deliver on organic performance, posting a very solid growth in 2019. I would like to emphasize that Iliad continues to generate the majority of tenancies in Italy, showing a strong commitment to Cellnex, and that we see sustainable levels of organic growth across all of our markets.

Our strong financial performance this year is the result of our organic growth, our focus on efficiencies and the contribution from recently acquired assets. Revenues have been -- have increased 15% compared to last year. Adjusted EBITDA is 16%. And our recurring levered free cash flow has increased a robust 15%, with our backlog reaching EUR 44 billion, assuming the closing of all announced deals.

Thanks to our unique industrial profile, Cellnex has the know-how, the processes and the resources in place required to make sure that our integration efforts and our growth strategy go hand in hand. The validation of our value proposition in Europe and the successful execution of our growth strategy create a virtuous circle by which new opportunities are constantly generated. Additionally, our industrial profile lays the foundations for a more progressive relationship with our clients after an initial agreement. Finally -- I'm sorry. And as growth needs to be funded, we have taken the necessary steps to significantly improve our financial flexibility by executing 2 successful capital increases in 2019 and making sure we keep all doors open in terms of availability of funding options.

Finally, the set of results we are presenting today represents a small beat compared to our guidance. We are also providing our view for the year 2020 with key metrics expected to grow more than 50%. Please bear in mind that these figures exclude the future contribution from Arqiva as we are still working on its closing, and we will update our 2020 guidance accordingly.

Moving to Slide #3. Here, we have the historical performance of our key value metrics. As you can see, our adjusted EBITDA has grown around 25% on an annualized basis and our recurring levered free cash flow around 20%. This growth has allowed Cellnex to become an entity several times the size we had at the moment of our IPO in 2015. And at the bottom of this slide, we are showing a summary of our historical M&A activity, a successful growth strategy that has led us to invest or commit to invest a total of around EUR 14 billion since 2015.

On Slide #4, just a quick update on the results of our growth strategy in terms of footprint and distribution of financial metrics. When the Arqiva transaction is closed, Cellnex will underpin its leadership position in Europe as the main independent telecom infrastructure operator by managing a portfolio of around 58,000 sites. We will further increase our financial magnitude, and we will significantly improve our business risk profile. In this sense, around 85% of our revenues will be generated by Telecom Infrastructure Services, and around 85% of our EBITDA will be generated out of Spain.

Finally, I would like to emphasize that ESG is a central element of our strategy, and we believe that the principles of business ethics, good governance and respect for the environment should cover our actions. And consequently, we are making substantial efforts to provide a clear picture of how Cellnex is managing sustainability-related questions, providing data beyond climate and making explicit commitments in the areas of ethical management, good governance or people development.

And with this, I will now hand over to our CEO -- CFO, José Manuel Aisa, who will provide more details of the period.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [3]

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Thank you, Tobías, and thank you all for your attention.

Moving to Slide 7. We are showing here our operational performance in the year. As Tobías mentioned, we have a strong organic growth generation potential, which we think can be sustained across all our markets. Total PoPs have increased 50%, including the contribution not only from organic growth but also from change of perimeter. If we focus on pure organic growth only, PoPs have increased more than 5% mainly due to the continued mobile network densification trend we have seen across Europe. More specifically, I would highlight the strong organic growth contribution from Iliad in Italy as well as the contribution from new customers and the progress we are making on our build-to-suit programs. Finally, DAS nodes are growing at around 25%, which illustrates the opportunity for Cellnex to continue providing high-capacity connectivity solutions for indoor coverage.

On Slide 8, you can see a list of the commercial initiatives we are implementing in order to secure future organic growth. Summarizing. Iliad is now generating organic growth both in Italy and France, and we believe there is still room to continue expanding this long-term industrial partnership. We are seeing further demand for our services not only in traditional markets but also in newer markets with colocation requests from new tenants, discussions around densification solutions and around 5G development. We are leveraging on CommsCon credentials to implement more projects in the area of indoor coverage and densification solutions as a neutral host across Europe with interesting opportunities under discussion for football stadiums, transport systems, bank branches and shopping centers. We are also expanding our 5G capabilities beyond our core business by analyzing opportunities in tower-adjacent areas such as fiber, outdoor small cells or mobile edge computing, always with towers at the core of our strategy and only willing to make progress on these initiatives if they offer tower economics.

Moving to Slide 9. You can see here the building blocks of our recurring levered free cash flow. The positive impact on cash flow from our organic growth, including efficiencies, is reinforced by both the gradual contribution of new sites associated with our build-to-suit programs and our change of perimeter. This total contribution is partly offset by cash elements below our definition of adjusted EBITDA being payment of leases linked to new portfolios as an important contributor. Taking all these effects together, Cellnex has generated a strong recurring levered free cash flow of 15% in 2019 compared to 2018.

Moving to Slide 10. Our revenues have increased 15%; our adjusted EBITDA, 16%; and also recurring levered free cash flow by 15%. Please note that our adjusted EBITDA margin reached 68%. Based on the figures in the table, you can see that this 16% adjusted EBITDA growth is mainly explained by the contribution from Telecom Infrastructure Services organic growth and build-to-suit and acquisitions combined with efficient management of our OpEx base. Payment of leases increased due to a larger perimeter, maintenance CapEx is in line with our guidance, and interest paid reflects the terms of both our debt structure and our available liquidity.

Moving now to our balance sheet on Slide 11. Assets mainly increased due to our M&A activity in the year. Available cash has increased. This is a result of our capital increases in 2019. And borrowing increased due to instruments issued in the period. Compared to December '18, our net debt increase is due to our M&A activity in the year, with our liquidity position allowing us to face our committed investments and also continue pursuing the opportunities in our pipeline.

For a detailed picture of our capital structure and our available liquidity position, I would bring your attention to Slide 12. Our debt has an average maturity of close to 6 years, a cost of around 1.5%, and we are not expecting any material refinancing before 2022. It is important to highlight that we have a significant available liquidity position to close to EUR 7 billion. We will reach a backlog of around EUR 44 billion when we close and deploy all announced projects and that our capital structure has no covenant, no pledge, no guarantee. This unique combination allow us to maintain our financial flexibility by providing us with a wide array of available options to continue funding our growth.

Moving to our Financial Outlook section on Slide 13. As you can see here, we have beaten our 2019 guidance in terms of adjusted EBITDA, our recurring levered free cash flow, while CapEx has performed in line with our expectations. We revised our financial outlook 2020. We expect our adjusted EBITDA to reach between EUR 1,065 million and EUR 1,085 million, which represents a growth over 50%, which we also expect for our recurring levered free cash flow. Please note that these figures do not take into account Arqiva. Once we have clarity about when Arqiva is going to close, if it is in May, in June, July, in September, we will obviously update this outlook with a new range. Please also note that Arqiva has a big impact on our adjusted EBITDA, so taking 1 month less or more will introduce here a little bit of noise. So we'll have decided, first of all, to give you without this volatility in terms of few months of closing. As already mentioned by Tobías, please bear in mind that these figures exclude the future contribution, which we expect to close a little bit later in the year, maybe Q2, Q3.

Last but not least, we are very happy to announce the agreement between Cellnex and Bouygues Telecom for the rollout of a fixed and mobile transport network that will boost the 5G ecosystem in France. This network, operated by the company that will be managed by Cellnex, will interconnect rooftops, towers, mobile edge computing centers, metropolitan offices, central offices so that high-capacity and low-tenancy services can be provided. You will find all the relevant details and financials in the corresponding slides, but we would like to highlight that given the strong growth in data traffic and the arrival of 5G, this project will transform our clients' network, and we are very proud to be part of it. This project fits perfectly into our strategy because of our strong industrial profile that make us the ideal partner for this type of blueprint agreements. We expect exactly the same returns and are able to replicate the economics of our core tower activity into a new adjacent asset class that's expanding our addressable market. And of course, our neutrality allow us to offer this kind of projects to other key anchor tenants, strengthening our industrial ties and becoming our clients' partner of trust.

And with this, we are now at your disposal to answer any questions. So please, let's open the line.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Simon Coles from Barclays.

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Simon Alexander Arulraj Coles, Barclays Bank PLC, Research Division - Research Analyst [2]

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Simon from Barclays. I guess the first one is on fiber to the tower. Could you give us a bit more information on how the business model actually works? Like how easy is it for you to add additional towers to the agreement that you've done? You talked about selling capacity to third parties as well. Could you give us an indication on the sort of operating leverage that's involved with that? Is it similar to the macro towers in that a lot of the revenue would drop straight through to EBITDA? And do you see synergies from this fiber to the tower with some of the other sort of adjacent businesses that you talk about, maybe such as small cells?

And then on that point, you touched on adjacent business streams. And thinking on small cells, it's been growing nicely, but it's still quite small in the grand scheme of things. And you bought a small cell company, CommsCon, a number of years ago, which brought you some expertise. So I'm just wondering, what do you see as the midterm opportunity for small cells? And are you seeing any change in demand from the operators on small cells?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [3]

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Thank you, Simon. We also have with us Alex Mestre, who you know extremely well, our Global Business Director, who will answer your -- the questions.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [4]

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Sure. So on the first point, in relation to the fiber to the tower, so fiber to the tower is an element that we see as mutualizable as well as the tower is. So once you have what we think as the route of the tower being the fiber connected into a tower, that fiber is perfectly shared with any tenant that we may have on the tower.

The way we are doing that transaction that we are today announcing is that this fiber is also having an anchor, so the business case is exactly like the tower one. We have an anchor with a long-term contract with us, and we have space in the fiber in order to colocate other potential tenants that we may be having in the tower. And we can offer that adjacent asset, which is the fiber and which is the central offices, which is connected on the other side of the fiber to the tower to colocate their equipment as well. That will be the central offices or the metropolitan offices.

So with this transaction, what we are overall doing is closing the loop from the architectural point of view of the 5G new converged network, fixed and mobile where all the critical elements of the network related to one operator are into the infrastructure envelope of Cellnex, having the tower as it's, let's say, origin in the architecture. So all the elements that we are having into the transaction are mutualizable and very much interlinked among themselves because the rest of the fiber, which is connected to that, it is the fiber between the central offices and metropolitan offices, which is as well mutualizable. That would be intending to cover the first part of the question.

In relation to the second part of the question, small cells; and DAS, distributed antenna systems. So as previously we have already indicated, we're continuously having a growth on the DAS systems. The difference between a small cell and DAS is very technical. However, DAS, you can see it as a sort of venue type of coverage. And that could be stadiums, could be shopping malls, could be indoor, whereas small cells is more street-like kind of coverage, which is not yet being deployed massively as we have already anticipated in previous discussions. However, the DAS, it is now, specifically in those areas where there is a lot of concentration of users, an element where we are devoting quite a lot of time. And the results, as you can see, are so far good in relation to the projections that also we may be foreseeing in the future.

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Operator [5]

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The next question comes from Roshan Ranjit from Deutsche Bank.

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Roshan Vijay Ranjit, Deutsche Bank AG, Research Division - Research Analyst [6]

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Three for me, please. Firstly, just touching on the first question, you talked about keeping a 30% capacity for third parties. Is that a number which is potentially open for discussion? Let's say, for example, your anchor customer needs more or you see good demand, are you then able to maybe build additional fiber lines coming off the same tower if capacity is maxed out?

Secondly, you talked about a shareholder loan to the newly incorporated company. Is it possible to know how much that loan is? Because I assume that gets paid back after the 35-year period.

And then just turning to the operational dynamics. You introduced this new guidance, the greater than 4% organic PoP. Is it possible to get a sense of the breakdown within that? Because clearly, you've got some new growth markets, I assume Italy, France are big growth areas there. But what about Ireland and Portugal?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [7]

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Thank you, Roshan. Let me maybe start with the last one, and then the sequence will be Alex with the first one and José Manuel with the second. On the -- well, I would say that in terms of new markets, we are not foreseeing generation of organic growth different from what you are seeing today at a group level, okay? Maybe just to add to that description will be Italy is performing very well, and you know the reason why. I mean Iliad, we have a fantastic commercial relationship. They are building their own network in Italy, and they are providing services. And I would say that Iliad's contribution to our organic growth in Italy is putting out a positive pressure on our organic growth at a group level.

In terms of other markets, I would say that our -- we are expecting the operating assumptions that we made at the moment of these -- of assessing these opportunities are not very different and are pretty aligned with the organic growth that we are generating at group level.

Coming back to your first question, maybe Alex?

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [8]

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Yes. With -- in relation to the capacity of the fiber, which is the number of fibers, normally, as you may be aware, when we talk about the fiber, it is a cable with a lot of fibers inside of it, and that could be on the range of dozens of them. So on the top of that, you can also multiplex several signals on a signal fiber, so the capacity is honestly huge.

Then on the way that we have splitted initially the -- such physical capacity, as you said, 70-30, we do not expect, let's say, having to change that. It would be great news that we would be needing more capacity than the one, and we will be happy to have that problem on our hands. That would be the moment that we will be also open to deploy more CapEx if required. So far, with needs that we are envisaging for the both parties, Bouygues on one side and we, in order to commercialize to third parties, we believe is an appropriate split of the capacity. So we don't see any need to change it. However, we are open to consider that in the future.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [9]

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So in terms of the financial structure of this deal, first of all, it's important to highlight that we have -- we do have a partner that, from a legal perspective, have 49% of the company and Cellnex having 51% of the company. Therefore, we have a structured from a financial perspective this deal with upgraded finance that is going to cover more of circa 60, 6-0, percent of the total financing. This mini plan -- in fact, this is a mini plan, will be withdrawn as this project is built, so it is -- we are not going to have this money upfront. It will go step by step. And then there will be an equity contribution by both partners that will justify this 51% and 49%. However, this equity contribution is not big. I would say it's small. And the rest, the gap, will be a shareholder loan by Cellnex. This shareholder loan by Cellnex, let's call it circa EUR 300 million, will guarantee to Cellnex 2 things. First of all, it will guarantee a minimum equity IRR. And on top of that -- and we are talking about a minimum equity IRR. And on top of that, will allow Cellnex to have all the economics of this company during the next 35 years.

So we can say that from an economical perspective, this project belongs to Cellnex almost in 100% during the next 35 years. So very happy to have this. I think that from a tax perspective and a financial perspective, from a return perspective, give us visibility, give us the return we are asking for as always. And at the same time, it's very efficient. So please note that finally, that this mini plan of EUR 600 million is a reality. We have already signed the deal with 2 key banks, key partners bank of Cellnex. So this is already ready to start working.

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Operator [10]

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The next question comes from Andrew Lee from Goldman Sachs.

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Andrew J. Lee, Goldman Sachs Group Inc., Research Division - Equity Analyst [11]

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I have 3 questions actually this time. Just firstly on the deal pipeline. So you're still, I think, referencing what happened recently, the EUR 11 billion of opportunities that you highlighted at the start of last year. That feels a bit outdated now given the amount of deals you've done, the changing attitudes of operators, 5G and now the fiber backhaul deals that you're showing that you can do. So how should we think about deal opportunities from here? That's question one.

Secondly, just on the French accelerated organic growth in Q4, have you factored that into your guidance for 2020? And also, should we anticipate potential network sharing agreements post the 5G auction in France as offering upside to your guidance?

And then final question, just on Spain. So I wonder if you could give us any comments around the government measures on taxes, so Spanish activities, rises in wages and corporate -- the [corporate] tax rate, et cetera, on the financials of your business?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [12]

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Thank you. Thank you, Andrew. Maybe starting with the third one, yes, José Manuel?

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [13]

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Yes. I think let's go to the -- to this, the last one. So the tax corporate activities in Spain, so what the Spanish tax authority or the new government is trying to do. Look, as this is public information in our annual account, you will find that Cellnex is and right now having inspection by the Spanish tax authority, in which, as clearly stated in our annual accounts, we do not expect any impacts at all. So I'm very happy to say to you that according to our -- the current tax framework and also what we feel will be the next tax framework, Cellnex is very well positioned and has confirmed every single hypothesis that we have. So no change at all; everything is going fine. And all these initiatives that we are taking now, in the last question you were raising about the shareholder loan, all this, I think, is fully commensurate with our tax strategy here in Spain and France and will allow us to somehow even reinforce further all the tax structure of Cellnex. So, so far, so good, happy interactions with the Spanish tax authorities, as reflected in our annual accounts.

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [14]

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Maybe Andrew, coming back to your second question, I would say that the answer is no. I mean we haven't factored any acceleration in most of the agreements between clients unless we have more visibility on how these agreements are holding.

Also, just to clarify that conceptually, I mean the active sharing means 2 MNOs sharing 1 PoP, so that would have an impact actually on our organic growth generation. I mean of course, as you can imagine, we are also working on mitigants from a pricing perspective, so it is true that with one operator sharing more, they should be able to densify more than before. So could be a price mitigant, a volume mitigant. But as you can imagine, at this stage, with the limited information we have, we are not factoring this into our 2020 guidance. I guess that we still need more information directly from mobile operators.

And on your first question, maybe the answer is yes. I mean I guess that is EUR 11 billion figure is something we provided at the beginning of last year. Now what we are showing to you is basically the progress we are making based on that reference that we provided last year. And we don't think that, that is representative of the amount of opportunities that we have on the table. I mean it is true that now this project with Bouygues Telecom potentially might open the door to similar projects with other clients. There are many interesting projects that we have already on the table also on the tower business. So in due course, we will update this figure as we are comfortable giving you our figure. But basically, yes, we're -- to say simply, what we are doing is to give you an indication of the progress we made on a figure that we provided last year. But it is outdated, and we still need to work on a new one.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [15]

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Yes. Maybe just to add a comment on that, that this project with Bouygues Telecom is a staggered project in 7 years. So it's not a one-off investment. So maybe we should factorize it accordingly. Otherwise, seems that the EUR 11 billion is a one-off pipeline opportunity.

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Operator [16]

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The next question comes from Nayab Amjad from Citi.

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Nayab Amjad, Citigroup Inc, Research Division - VP [17]

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Is there a reason for not including Arqiva in the guidance? What issues or remedies, if any, are you expecting in relation to the close of the Arqiva transaction?

And then my second question is, do you foresee any remedies for INWIT in Italy and if you think that could be an opportunity for you? Can you tell us what are your expectations, and what risk do you see to your business in relation to this?

And finally, a broader question. The more prominent MNOs are doing network sharing deals, while Cellnex has been mostly acquiring the [sites] of smaller operators. Do you see a risk from network sharing deals and also the planned tower IPOs next year?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [18]

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Let us try with the first and second, and we're willing to -- actually to get -- to repeat your third one. First one, Arqiva, José Manuel?

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [19]

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Well, maybe I will take your first question about U.K. Frankly speaking, as you very well know, our presence before Arqiva was very, very low presence in the U.K. I mean if I am not wrong, our revenues in U.K. were about GBP 9 million -- around GBP 9 million or GBP 10 million of revenues. Frankly speaking, we do believe that we are on track. We are in the process, we were aware of it, we knew very well, and we do not expect any remedy in the U.K. regarding our acquisition of Arqiva. Obviously, it's taking time, and this is the reason why we cannot factorize when we'll get the clearance. We will get the clearance from the CMA. This is the reason why we thought that would be better to exclude Arqiva in our guidance and then to update in due course.

About Italy, maybe taking also your question about Italy. Frankly speaking, we do not expect a positive impact on the potential remedies between Telecom Italia and Vodafone. But we'll see what will be the evolution on this radar for us. Italy is overperforming since our acquisition business plan. Obviously for us, Telecom Italia and Vodafone remain a potential customer for us. And as we are disclosing to the market, Italy is performing very well, also thanks to our relationship -- our commercial relationship with Iliad in Italy.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [20]

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Yes, if I may, Tobías. From a pure outlook perspective, just to recall, using information you have, Arqiva represents in terms of EBITDA every 6 months around EUR 100 million. So let's suppose that as of June 30, 2020, we obtained the clearance from CMA, and obviously, we could close the deal. At that time, we would upgrade this outlook with EUR 100 million for 6 months, okay? EUR 100 million is a lot of money. So if we change 1 month up, 1 month down, this could have impact on the outlook. So we have preferred to take this volatility out and to give you what is the, let's say, base -- the case -- the base case without Arqiva. In Q1 result, we'll have full visibility. We will address the closing date, and at that time, bear in mind, EUR 100 million EBITDA -- adjusted EBITDA for 6 months. So if it is in July instead of 30 June, so we will adjust proportionally.

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [21]

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And sorry, Nayab, if you could please remind us your last question.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [22]

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Yes.

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Nayab Amjad, Citigroup Inc, Research Division - VP [23]

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So the more prominent MNOs are doing network sharing deals, while Cellnex has been mostly acquiring the [sites] of smaller operators this year. Do you see a risk from network sharing deals and also the planned tower IPOs next year?

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [24]

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So you are talking specifically about one MNO specifically?

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Nayab Amjad, Citigroup Inc, Research Division - VP [25]

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Generally, the MNOs, for example, Vodafone and Telecom Italia and also Vodafone and also [Deutsche] in Germany. And also the upcoming IPO next year, do you see a risk from the Vodafone IPO next year of the towers?

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [26]

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Okay. Well, not really sure to get the question, but just a comment on the type of RAN sharing agreements that we are seeing, the ones you mentioned precisely. The policy that normally -- or the strategy that normally is being applied by the MNOs is doing RAN sharing on non-dense areas, okay? So when they look at the coverage on more dense areas, they still want to rely on their own network and not being shared. And this is something that has already happening in 3G/4G environments and is exactly the way that until now all the RAN sharing agreements have been fostered. Actually, when you look at some of the RAN sharing agreements that were done on 4G, what we are perceiving is that there is a sort of unwinding of some of those RAN sharings that were done on big populated areas like, for instance, London. So what we see is that the people is going backwards in terms of sharing in these high-dense areas. I don't know if that answers your question.

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Operator [27]

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The next question comes from Giles Thorne from Jefferies.

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Giles Thorne, Jefferies LLC, Research Division - Senior Research Analyst and Technology Research Analyst [28]

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I had 3 questions, please. First, to relate to the Bouygues partnership announced today. Firstly, this is obviously a big shift in your capital allocation into a new area, and it's also a significant shift in scope for European towers as a whole. And that's all very exciting. But what I'm trying to understand is -- or trying to bridge is the capital being deployed and where capital is actually most needed right now in Europe. So the infrastructure you're building is going to be removing capacity bottlenecks higher up in those -- in the network, but those bottlenecks will only become a real issue with mass 5G rollout. And given MNOs in Europe are evidently finding it hard to close the investment case for mass 5G rollout because of challenging data monetization, my very long-winded question is, is there really -- is this really the right time for metropolitan fiber interconnection investments in Europe?

Second question, and it's kind of associated with the first question. Crown Castle in the States has obviously been the leader in metropolitan fiber interconnection investment. And there are [swaths] of differences between what they've done and what you're doing, but it's essentially the same. And my observation is that Crown Castle was initially incredibly optimistic around their fiber deployments and then gradually began to concede in their narrative that it's actually not quite as good a capital allocation as a macro tower. So inevitably, as you're going around meeting with investors in the coming weeks, what's your response to that observation?

And then the third question was just coming back to, I'm afraid, the Arqiva transaction. I note everything you said a moment ago. It's obviously now gone into a full Phase 1 investigation. Could you tell us exactly what your understanding is today of their reservations? Why have they kicked it to Phase 1? And was the Arqiva withdrawal from the TfL DAS network tender anything to do with their concerns? Sorry, there's quite a lot there, but yes.

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [29]

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Thank you, Giles. Let me maybe start with the second one, Alex will provide a broader answer to your first one, and just to finish maybe, José Manuel, with Arqiva with the last one.

On CCI, maybe we have a limited understanding of the details on how we are -- how they are assessing their own fiber strategy. In our case, we see this type of projects as the natural transition in the relationship with an anchor tenant. So we have the same economics. We have the same expected returns. This is something that is requested by our clients, and we are more than happy to help in this process. But it's very important that the inception of these agreements come directly from a specific need with -- from an existing client.

We are not sure if everything that Crown Castle is doing in the space is -- if they are vetting any sort of retail risk, if first they build and then they ask for clients. In our case, we have a huge visibility on future cash flows mostly coming from the anchor tenant. But I would say that it's a different asset class, but we regard this type of projects as necessarily the same as a tower from a cash generation perspective. So high visibility of future cash flows coming from an existing client and, of course, happy to offer excess capacity to third parties. So in a sense, exactly the same to our model.

On the first question, Alex?

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [30]

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Yes, exactly that. So the elements for us into jumping into this type of adjacent assets is well, first of all, as you said, should be a tower-like business case. And this is where we put all, let's say, our effort and creativity to convert that to a tower-like business case. And this is exactly the transaction, how it has been designed in France. And very important is that it is an anchor client that we already have. And based on that, this is where -- and actually, this is the case in France. We are the partner for Bouygues Telecom in all dense and suburban areas of France. And this is extraordinary in terms of the partnership that you are actually establishing with the anchor client.

Then maybe it's a good point, the one that you have raised in relation to the 5G. The trigger for all this new architecture is the 5G. The refurbishing of legacy technologies is already happening. So the full implementation of this network will not need to wait for the full implementation of 5G, and this is an important element. So what we are seeing is that our partner is converting the old MSCs' 3G type of infrastructure to the current future-proof, 5G-ready central offices, for instance, that we will be able to colocate the edge computing when the 5G. But the refurbishing of all this architecture is already going on. So the cash flows, we will not need to wait for the 5G being fully implemented on this type of transaction -- CapEx deployment transactions that we do.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [31]

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And Giles, regarding your last question on the CMA. Well, CMA, we have been doing the normal course of business, first of all, to give all the information for the notification, which, in the U.K., takes time. It's a thorough assessment of every single detail of the reason for our acquisitions, information about the market. I think it's a very complete file that we have submitted, and I think we have finished that -- the notification 2 days ago. Now according to the British law, there is 40 working days in which this notification will be assessed under Phase 1. And well, if we take -- just broadly speaking, a general view of what has happened in the CMA, in this case is 90% of the cases are resolved during the CMA Phase 1. So what -- we do think we are following the normal process, and everything is on track.

You were talking about remedies. You were talking about reservation. We do not see any reservation [on] any remedy. We only see what we expected. In fact, when we signed the deal, we said to you that this deal was going to be signed in October '19 and closed in H2 2020. So I think we are on track, a very good track.

Finally, Giles, we have gone through antitrust authorities in other countries like France. And we -- I think that you saw what happened with our acquisition of Iliad towers. We signed as of April 2019 and we just closed the deal just before year-end 2019. So it took a little bit of time, all the process. This is normal course of business in our tower world.

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Operator [32]

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The next question comes from Sam McHugh from Exane.

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Samuel McHugh, Exane BNP Paribas, Research Division - Analyst of Telecom Operators [33]

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A few from me as well, I'm afraid. First one, on the guidance, you obviously beat in 2019. I wonder if you could give us a bit of detail about the moving parts. I guess number one would be [on the -- all] sites in Italy that have been transferred, are you assuming that they all come across at the very beginning of 2020? And I wonder how material that is for guidance and whether you've included anything for the new Bouygues deal.

And then secondly, you mentioned Iliad [next year as a big] growth driver. I think at the time, you said the phasing of the BTS program will be very much back-end loaded, and there was an option to upsize the BTS program. Now I appreciate Iliad haven't said anything yet, but is that still your base case in terms of how you're kind of expecting that deal to go? Are you seeing anything yet from Iliad that will make you change that view?

And then just lastly, I noted that you sold your stake -- or you bought, sorry, the stake from DT Capital Partners in Switzerland. Can you maybe elaborate a bit on who decided to sell, whether you're still working with them on other projects?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [34]

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Thank you, Sam. Maybe on the moving parts of the -- within the guidance, yes, we are starting [simply matching] with our -- with the EBITDA we are closing in 2019. Also, we are doing organic growth assumptions quite in line with what we have generated in 2019, also progress on this [program.]

It is true that this organization has grown a lot this year. So we need to make the necessary measures to adapt our size to this growth process, so in terms of you might expect some increased staff costs and SG&A in 2020 in order to adapt the group to this transformation process. And then other than that, I would say specifically the contribution from the deals that we have been announcing presently, I would say that the most obvious contributor is Iliad and Salt, which were closed in December last year. Also bear in mind, this is an important point, that not 100% of the towers we're announcing in Italy from Iliad will be contributing from day 1. So 20% of these towers will be transferred during the course of this year. So then we will be making progress on France obviously in terms of Iliad France and also Bouygues Telecom. We are not including any contribution here from this transaction that we are announcing today. So also an important note here.

And then I would say that from a -- on a project-by-project case, basically, you [shouldn't] be expecting incremental contribution from a small transaction that we announced in Netherlands, of course, Ireland, the towers that we will be managing for BT in the U.K., of course, Portugal and the contribution from the towers we acquired from Orange in Spain in late 2019. And then I would say that a small contribution from a small agreement that we signed with El Corte Inglés, a retailer group in Spain. So those will be the moving parts on how we see 2020. I hope that's clear.

Maybe on the -- maybe you should remind us, Sam, apologies for that, the rest of your questions.

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Samuel McHugh, Exane BNP Paribas, Research Division - Analyst of Telecom Operators [35]

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Yes. And the second question is just on Iliad in Italy as a growth driver. The phasing of the BTS program, I think originally it was back-end loaded. There was an option to upsize the deal. I wonder if you are seeing anything that would change in your view on that. And then the second one was on Switzerland and DT Capital Partners.

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [36]

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Basically, on Iliad Italy, we prefer to be prudent. It is true that the organic growth that they have generated this year has been fantastic. So I guess that a similar pattern should be seen this year, of course, as long as they make progress on the creation of their own network. So I guess that from 2020, we should be expecting organic growth similar to that they generated in 2019. Beyond that, I guess that we have less visibility.

Build-to-suit is maybe progressing a bit faster than we expected. So it is true that when we announced the sales, we mentioned back-end loaded, but maybe you should be stepping more of a linear contribution from this agreement.

And then maybe lastly, on Switzerland. Having acquired Deutsche Telekom Capital Partners' stake, as you know, this is an option they had. And given the performance that we -- and the opportunities that we are identifying in Switzerland, we are more than happy to continue expanding and increasing our exposure to the country.

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Operator [37]

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The next question comes from Ottavio Adorisio from Societe Generale.

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Ottavio Adorisio, Societe Generale Cross Asset Research - Equity analyst [38]

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Three questions on my side. The first is a follow-up from the previous one, and it's basically on the deal with Bouygues. I was wondering if management can say something about the fact that Bouygues will be the main client, a key shareholder and possibly the main supplier because it's the construction company for (inaudible). Does that create a conflict of interest or not?

And following up on this, they will have a 49% stake -- that create any constraints on how you're going to manage the company going forward? Could you use (inaudible) to connect other sites that are not part of today's deal? And by the way, how many sites (inaudible) is basically aimed to connect over the next 7 years?

And the EUR 300 million you provide as shareholder loan, I suppose, is not coming straight away considering that the company is going to invest [in building] over 7 years. So if you can tell us how that money will be provided to the company.

And lastly, on this particular deal. I think it's a bit puzzling that they signed a deal for 30 to 35 years while they only have a lease on 20 years on the sites that they actually sold to you a couple of years ago. So that means that they cannot move from the sites, so they basically will be paying for capacity for nothing. So there is any clause that if ever they leave the sites [the best way they can] discontinue the capacity deal that's signed today? So they're in the first.

And then moving on the other that would be the most straightforward, the funding. In the past, you've been relatively vocal in the fact that there's so many different way you can fund deals. And to be fair over the last year, we've seen quite a few. But one of the things that -- one of the features that is becoming more prevalent is the increasing role played by minorities. We've seen with the deal in Portugal, we've seen with the deal in Iliad, and today we see with the deal with Bouygues. Now all of them, they played relatively different way. Iliad was a straightforward minority. In Portugal, actually, you almost guarantee the returns to the -- your partner. And with Bouygues, you actually finance their -- the stake. So we're just wondering, going forward, if this will be your preferred way or basically something that the counterpart somewhat demand because they want to share on sort of the upside from tower infrastructure or like today, fiber infrastructure?

And the third is on Arqiva. When you present the deal, of course, it's -- Arqiva, you bought the company not straight from the MNOs. So if you can tell us, who is the main clients of Arqiva? And considering that when you sign the BT -- the deal with BT, a significant portion of the value was on the right of first refusal for BT if they were eventually going to sell some towers. If you can tell us how long that optionality it's -- last and if there's been any discussion with BT on that front.

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [39]

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Well, hey, this is like a long, long, long, super long question. You will have to help us, Ottavio. I think we will have some problems to answer everything. Let's just start by the middle, and you help me. Let's start with the minorities. Ottavio, in Portugal, we do not have any minority at all. We have acquired 100% of OMTEL, so no minority. In Iliad, there is a minority, which is for our towers in Iliad. We have a minority, which is Iliad, for 30%, which is for us, it tends to be recurring. It happens sometimes. As you -- if you recall, when we acquired Galata, we at that time had 10% of the company. So we tend to see this structure when we are acquiring all the towers of a telco, it tends to happen that the telco wants to have a key -- an eye on what we are doing, which we find perfectly right. So it's normal. We do not see any change in the policy.

In terms of this new deal, fiber-to-the-tower deal that we have just signed and presented to you, in this case, I think we'd have to split what is the legal -- pure legal and the economics. The economics tend to be, again, 100% Cellnex for 35 years. That is at 35 years.

So there is another question that you were raising, which is, "Well, it's 35 years on one hand, but your towers is only 20 years." Well, I would like -- and you will recall easily that we tend to sign all-or-nothing deals, which means that at the end of the initial term of the contract, we have a clause by which if the parties or a party need to continue working, it has to be for the full portfolio or for nothing. So this give us visibility in our cash flows and in our backlog. So nothing new, exactly the same structure we use for all -- for the vast majority of our deals. So there is no mismatch between 30, 35 and 20. I will say to you that it depends on the structure, in this case, of the CapEx invested, which is a lot of money, and then how to get the return of this investment and a minimum return that the market demands to Cellnex. So I think that look at other way around, what we are securing is your money.

Then to be honest, I do not recall. I think -- can you -- the questions of -- the first 2 questions. Can you recall me?

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Ottavio Adorisio, Societe Generale Cross Asset Research - Equity analyst [40]

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Yes. Let me rephrase. It was only one last, last, but also want to make a clarification on the first one. The last one was on Arqiva, who was the main client? And remaining on the U.K., the optionality bought from BT, how long it's going to last and if you basically entertain any conversation in terms of them selling towers.

By the way, before going to that one, the one you basically reply, my point on the minority is that -- and in the past, minority was a way for you to lower the capital you invest. It's a way to fund deals, and that we've seen in Sunrise. It looks increasingly that actually, as you said in your answer, that minorities are actually [aiming or willingness] to keep an eye on what's going with their -- with this particular infrastructure. So the question is, that's a question I was asked earlier, does that create any constraints on how you can actually use that infrastructure? For instance, in the clients you can put in (inaudible) in the -- is if you can use (inaudible) to actually connect sites away from this particular deal. So as a 51% controlling shareholders, what's your [state] of control? There is, any veto power from Bouygues?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [41]

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Yes. Now I understand. There is no change. I mean exactly, the contract, the master lease or master service agreement, there is no change, give us total flexibility to introduce new partners into this -- into the business. So there is no veto, and there is no veto at all. Otherwise, we are a neutral operator, and we -- this is in our NDA. So there is no change in that regard at all. No change.

And I remember that one of your question was about that conflict of interest, I recall. No, there is no conflict of interest. One of the beauties of this project is that we have spent very long hours to clearly identify who does what. I mean we do all this business from scratch. And we spend long hours in order to understand all the causality, all the elements, all the -- because we do have very, very clear standards that we are not going to break at all. So of course, we are -- we have all the optionability to share the infrastructure with everyone. Hopefully, as much as possible. It will depend on the market limitation but not because of these deals limitations.

And maybe, Alex, you can help me with Arqiva and the U.K., yes.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [42]

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On Arqiva. Under Arqiva, there were 2 questions. So who are the main base of clients of Arqiva. It is well distributed among the different players. And interestingly, as you know, there are 2 sort of JVs among the 4 MNOs. One is MBNL and CTIL, so those are the prime clients. However, there are unilateral deployments for each 1 of the 4 MNOs. So there are also direct relationship with the different MNOs directly, okay?

In relation to your question on the BT agreement we closed like 9 months ago or so, yes, this is still lasting that possibility of having access to additional telecom infrastructure that BT maybe consider to dispose. And there are around like 5 years still lasting for that right in our favor.

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Operator [43]

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The next question comes from James Ratzer from New Street Research.

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James Edmund Ratzer, New Street Research LLP - Europe Team Head of Communications Services & Analyst [44]

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Had 2 quick questions on the transaction with Bouygues. Just interested if you could talk us through a bit more of a breakdown of the EUR 1 billion of investment. I mean if I look at the cost INWIT is mentioning in Italy to upgrade a tower to fiber, they're suggesting around EUR 40,000 per site. If we use that as a benchmark, it would imply maybe EUR 200 million of the EUR 1 billion is being allocated to fiber backhaul. Is that a fair benchmark to use in France?

And then second question was then just regarding the deployment of assets that is not on the fiber upgrade in France. Could you talk us through how replicable those assets are by some of your competitors in France, in particular by Altice or Orange? I was trying to get an understanding of kind of how high you see the barrier to entry around that new investment.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [45]

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Okay. On the unitary CapEx, in order to put fiber to a tower, the reference you have given for Italy probably in the lower range. Here, we are talking a lot of rooftops in Paris and high-dense areas where probably the CapEx could be a little bit higher than the one you mentioned. However, you need also to take into consideration that there are 2 other types of assets within the perimeter of the transaction, which have to be taken into account. One is the 90 central offices that also have to be deployed plus the fiber among the central offices, those ones that today, we are also disclosing. But remember, we had the previous deal with [Quiberon] where these type of assets were also into the perimeter.

So all this interconnection of the fiber where there are quite a big amount of kilometers to be deployed of fiber -- thousands of kilometers of fiber to be deployed is also, let's say, the third element that you need to take into consideration when all the CapEx elements for the EUR 1 billion. That was the first question.

And the second...

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [46]

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Barriers to entry.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [47]

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The barriers to entry on that. Well, of course, here, there are -- when we envisage the potential scope of clients, there are -- the operators as basically the main ones, not only the big ones but also smaller ones, [Spirit] and others.

So the barriers to entry there in the tower, this is a quite unique element that only leads to our tower. So it doesn't make any sense for any operator deploying fiber to one of our towers not intending to be a PoP, a P-O-P, on our towers. So it is very much linked to the overall service provision of colocation on metropolitan offices of the equipment, fiber to the tower and equipment into the tower. So this is totally linked to the ramp-up that we have on services into the tower.

The rest of the infrastructure is perfectly mutualizable. The way we are building up those central offices and metropolitan offices is reserving certain specific space totally independent from Bouygues in order to be -- prepare for other parties that could be operators or other potential parties in the future for the edge computing services. So we are trying to be quite future-proof in that regard.

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James Edmund Ratzer, New Street Research LLP - Europe Team Head of Communications Services & Analyst [48]

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Those fiber lines in between the central offices, are those running alongside existing fiber connections that Orange and Altice would be deploying as well?

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [49]

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Yes. So the overall kilometers to be considered among the offices is 35,000 kilometers of fiber.

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Operator [50]

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The next question comes from Luigi Minerva from HSBC.

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Luigi Minerva, HSBC, Research Division - Senior Analyst [51]

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The first one is on just having your view on how replicable is the fiber-to-the-towers deal that you have announced with Bouygues today in other markets where you are present. Most operators, they claim they actually have most of their towers already connected with fiber. So I'm just wondering whether Bouygues is more an exception than the rule. And again, how replicable is the framework that you have used in other markets?

And then maybe expanding on that, if you now think about your geographic footprint, what are your priorities? Are you happy with where you are and aim to prioritize expanding your presence in existing markets or you are still open-minded about expanding your footprint?

And the last one is on Italy. It's more a precise one. It's about, if the INWIT transaction is approved, what is the likely negative impact you would expect in terms of losing business from TI and Vodafone?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [52]

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Thank you, Luigi. Maybe on the third one, our position has not changed. I mean the moment we heard the news about this intention to combine activities between Telecom Italia and Vodafone, we already assessed a potential impact. It is true that they will try to -- I would say to prioritize -- if that happens, they will try to prioritize providing business to INWIT. But given our understanding on when the companies will be sharing equipment and where they will be sharing network, we are not expecting any major impact. Also, an impact that might be coming is -- shouldn't be immediate because contractually, we have some protection here. So nothing has really changed on how we see this piece of news on our current operations in the country.

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José Manuel Aisa Mancho, Cellnex Telecom, S.A. - Corporate Finance, CFO and M&A Director [53]

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Well, about expansion, our first priority remains to find opportunity for growth in all the existing countries where we are today -- I mean in the 8 countries where we are today. This is -- it was and it is our main priority because it makes a lot of sense in terms of synergies and from operational point of view. But it doesn't mean that we are not always ready to -- understanding we have some opportunities in the countries where we are not today, honestly. But our strategy remains the same: we are delivering growth in all of the existing countries where we are today. And as we said earlier, we are always investing, looking at the future and identifying potential second and first step beyond of that. So happy to grow in the existing countries. But obviously, if you want to ask me about Germany or Belgium or other countries, obviously, we will assess it.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [54]

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And on the replicability of the fiber to the tower, well, in Europe, globally, there are more tower without fiber than tower with fiber. So the opportunity is there. For us, entering into that domain, the conditions are probably always the same: has to be an anchor client, a partner of ours, and the business case has to be a tower-like business case. If that's the situation, we are open to consider this type of deployments.

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Operator [55]

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The next question comes from Emmet Kelly from Morgan Stanley.

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Emmet Bryan Kelly, Morgan Stanley, Research Division - Head of European Telecoms Research [56]

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I'm afraid to say I've got 3 questions as well, please. The first question is just on build-to-suit. You have contracts for 9,000 sites. I think roughly half of these are with Bouygues and also with Iliad in France. I think in the past, you said these build-to-suit contracts are separate from the telco new deal, which will see 10,000 additional sites built. Is there any update on potential contracts to build new sites as per the telco new deal in France? And just beyond France, which markets are you most excited about on build-to-suit?

Second question, quickly, just on Germany. (inaudible) is looking at selling rooftop sites across Germany. Would you look at buying rooftops? And is there any way to scale a rooftop business?

And then the third question is on ESG, which you focused on Slide 5. Can you just maybe say a few words about the move to renewable energy in the wireless sector, whether it's using solar power, and also maybe just give us a date for what year you believe Cellnex can be carbon-neutral? I think the Paris accord and the telco sector are aiming for 2050. Do you think you can be carbon-neutral by then or sooner?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [57]

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Thank you, Emmet. I will say that on the...

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [58]

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On the build-to-suit?

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [59]

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Yes.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [60]

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Build-to-suit, yes. Yes, build-to-suit that now we are projecting basically for semi-urban and dense areas, so are not linked to the big deal in France, for instance, okay? And this is part of this overall partnership especially with Bouygues on high-dense areas.

In relation to the rooftops, yes, historically, rooftops have been a little bit out of the scope for traditional tower [corps.]We jumped into the rooftops with our first transaction in Galata, and we've been able to prove ourselves that, yes, there is colocation on the rooftops. And now when we have extended other rooftops in other geographies, what we do actually recognize is how difficult it is to have access to some specific real estate in a dense urban area. So once you have it, the colocation is absolutely plausible (inaudible).

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Tobias Martinez Gimeno, Cellnex Telecom, S.A. - CEO, MD & Director [61]

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And last, on ESG, basically, I will simply highlight that -- the certified acquisition of energy, and that is one of our measures that we are taking recently. And maybe that -- and this is something that we are doing for some years now. We are exploring the possibility to use solar energy in our shelters. But that's an initiative that has been in progress for some years now.

Okay. Thank you. Thank you so much. We have now reached the end of this session. And thank you again for your time today. And for any remaining questions, the Investor Relations teams will be at your disposal. Thank you so much. Bye-bye.

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Alexandre Mestre Molins, Cellnex Telecom, S.A. - Global Business MD & GM of Global Business [62]

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Thank you.