EuroTeleSites Q1 2025 presentation: Revenue up 5.9%, margins improve as expansion continues

Introduction & Market Context

EuroTeleSites AG (VIE:ETS) presented its Q1 2025 financial results on April 30, 2025, showcasing solid growth across key metrics and continued expansion of its telecommunications infrastructure portfolio. The company, which operates 13,662 sites across six European countries, reported improvements in both top-line revenue and profitability margins while advancing its strategic initiatives in third-party tenant acquisition and site development.

The telecom infrastructure provider’s stock closed at €5.28 on April 29, down 0.76% ahead of the earnings presentation, trading within a 52-week range of €3.48 to €6.15.

Quarterly Performance Highlights

EuroTeleSites delivered revenue of €67.7 million in Q1 2025, representing a 5.9% increase compared to €63.9 million in the same period last year. This growth was primarily driven by portfolio development, new tenant acquisitions, and indexation adjustments.

As shown in the following chart detailing the Group’s revenue and EBITDA performance:

The company’s EBITDA reached €59.6 million, marking a 9.5% year-over-year improvement from €54.4 million in Q1 2024. The EBITDA margin expanded to 88.0% from 85.1% a year earlier, reflecting enhanced operational efficiency and solid expenditure management.

EBITDAaL (EBITDA after leases), a key metric for infrastructure companies with significant leasing components, showed even stronger growth at 11.3%, reaching €40.2 million compared to €36.2 million in Q1 2024. The EBITDAaL margin improved to 59.5% from 56.6% in the prior-year period.

The company’s financial performance is further illustrated in this breakdown of EBITDA after leases and cashflow:

Cashflow (defined as cash flow from operations minus CAPEX paid) reached €49.5 million in Q1 2025, significantly higher than the €38.0 million reported in Q1 2024. This improvement was attributed to higher EBITDAaL and lower capital expenditure payments during the quarter.

The company’s detailed profit and loss statement provides additional insights into its financial performance:

Strategic Initiatives

EuroTeleSites continued to expand its infrastructure footprint, adding 36 new sites during the quarter, comprising 14 greenfield and 22 rooftop installations. The company’s total site count increased to 13,662, serving 16,966 tenants across six countries.

The following chart illustrates the company’s site and tenant growth trajectory:

A key strategic focus for EuroTeleSites remains the diversification of its tenant base beyond anchor tenants. The company reported good progress in this area, onboarding 24 new third-party tenants during Q1 2025.

Capital expenditure for the quarter totaled €12.3 million, slightly below the €12.6 million spent in Q1 2024. The CAPEX was primarily allocated to mandatory upgrades (€8.0 million), maintenance (€1.1 million), and rollout activities (€3.2 million).

The company’s CAPEX breakdown over recent quarters is illustrated here:

On the financial management front, EuroTeleSites completed a significant refinancing transaction during the quarter, securing €255 million through a private placement with A1 Bulgaria. The placement carries a fixed interest rate of 3.029% and matures in Q4 2026, complementing the company’s existing debt instruments that include a €500 million 5-year bond (5.25% fixed rate) and a €180 million private placement with variable EURIBOR plus margin.

The geographic distribution of EuroTeleSites’ revenue and EBITDAaL highlights the company’s concentration in Austria while maintaining diversified operations across the Balkans:

Forward-Looking Statements

EuroTeleSites provided operational and financial guidance for both 2025 and the mid-term. For the current year, the company expects revenue growth of approximately 4% (excluding one-time effects of €4 million), with capital expenditure projected at around 20% of revenues.

The company’s guidance is detailed in the following slide:

Management has prioritized debt reduction, targeting a leverage ratio of approximately 5x in the mid-term, down from the current 6.2x. To achieve this goal, EuroTeleSites has committed to allocating its annual results toward debt reduction and has indicated no dividend payments in the near future.

From an operational perspective, EuroTeleSites aims to increase third-party revenues and add approximately 200 net new macro sites in 2025. For the mid-term, the company projects revenue growth of 3-5% CAGR while maintaining its investment grade ratings from Moody’s and Fitch.

The company also disclosed a signed letter of intent with 4iG Plc in North Macedonia, potentially signaling further strategic expansion in the region, though specific details of this arrangement were not elaborated in the presentation.

With its disciplined approach to capital allocation, focus on operational efficiency, and strategic expansion initiatives, EuroTeleSites appears well-positioned to continue its growth trajectory while gradually improving its financial leverage profile.

Full presentation:

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