Earnings call transcript: Cellnex Q2 2025 misses EPS expectations

Cellnex Telecom reported its earnings for the second quarter of 2025, revealing a significant miss on earnings per share (EPS) expectations. The company posted an EPS of -0.0847, falling short of the forecasted 0.0126, marking a surprise of -772.22%. Revenue also came in below expectations at 978.5 million euros, compared to the forecasted 1.01 billion euros. Following these results, Cellnex’s stock price fell by 1.16%, closing at 31 euros, with a change of -0.36 euros from the previous day. According to InvestingPro data, the company maintains impressive gross profit margins of 89.6%, though analysts anticipate continued profitability challenges this year.

Key Takeaways

• Cellnex reported a significant EPS miss, with a surprise of -772.22%.
• Revenues were slightly below expectations, reaching 978.5 million euros.
• The stock price declined by 1.16% in reaction to the earnings miss.
• The company reiterated its confidence in achieving its 2025 financial targets.
• Strategic agreements and operational updates highlight a focus on infrastructure solutions.

Company Performance

Cellnex Telecom’s performance in the second quarter of 2025 showed organic growth in both revenue and EBITDA, despite missing analysts’ forecasts. The company reported revenues of 1.958 billion euros, representing a 6% organic growth, and an EBITDA of 1.163 billion euros, up 8.1% organically. The recurring levered free cash flow per share improved by 10.2%, demonstrating strong cash generation capabilities.

Financial Highlights

• Revenue: 1.958 billion euros (6% organic growth)
• EBITDA: 1.163 billion euros (8.1% organic growth)
• Recurring levered free cash flow per share: 10.2% improvement
• Strong cash position: approximately 1.6 billion euros

Earnings vs. Forecast

Cellnex’s EPS of -0.0847 significantly missed the forecasted 0.0126, resulting in a surprise of -772.22%. Similarly, the revenue of 978.5 million euros was below the expected 1.01 billion euros, a surprise of -3.12%. This marks a notable deviation from the company’s historical performance, where it has generally met or exceeded market expectations.

Market Reaction

In response to the earnings miss, Cellnex’s stock price fell by 1.16%, closing at 31 euros. The decline reflects investor disappointment and uncertainty about the company’s ability to meet future earnings expectations. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, despite trading at a relatively high EBIT multiple. The stock remains within its 52-week range, with a high of 37.31 euros and a low of 28.39 euros, and has historically demonstrated low price volatility.

Outlook & Guidance

Despite the earnings miss, Cellnex remains confident in achieving its 2025 financial targets. The company plans to maintain its investment-grade status and has announced a shareholder remuneration plan of 800 million euros in 2026. The focus will continue to be on profitable growth and operational efficiency.

Executive Commentary

CEO Marco Patoano emphasized the company’s commitment to growth and efficiency, stating, "We are successfully delivering on our push for more profitable growth with significant improvement in efficiencies." He also highlighted the importance of sustainability, saying, "Sustainability is not just a pillar of our strategy, it is embedded in how we operate."

Risks and Challenges

• Regulatory changes in the European telecom market could impact operations.
• The lagging deployment of 5G in Europe presents a challenge for growth.
• Potential market consolidation in France could alter competitive dynamics.
• Asset sales in Switzerland and France may affect financial stability.
• Economic uncertainties could pressure revenue growth and profitability.

Q&A

During the earnings call, analysts inquired about potential market consolidation in France, strategies for secondary tenant contracts, and the company’s approach to land efficiency and tower upgrades. Cellnex also addressed questions regarding potential asset sales in Switzerland and France, indicating a strategic review is underway. For deeper insights into Cellnex’s financial health and future prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which includes detailed analysis of the company’s strategic initiatives, valuation metrics, and growth potential.

Full transcript - Cellnex Telecom (CLNX) Q2 2025:

Maria Kehapaten, Head of Investor Relations, Cellnex: Hello. Good morning, everyone. Welcome to our First Half twenty twenty five Results Conference Call. I’m Maria Kehapaten, Head of Investor Relations, and I’d like to thank you for joining us today. I have our CEO, Marco Patoano and our CFO, Jaime Treies, on the call.

We’ll go through a brief summary of our results, and then we’ll be open to take your questions after the presentation. Okay. So without further ado, over to Malcolm.

Marco Patoano, CEO, Cellnex: Thank you. Thank you, Maria. Good morning, everyone, and thank you so much for your time. I’m delighted to start with the key highlights of the first half of the year, which continues to be marked by consistent execution with solid performance across all the key metrics, reflecting our commitment with our objectives. As a reminder, the numbers we are reporting today are impacted by our change of perimeter due to the sale of our business in Ireland and Austria.

There is no contribution from Austria for 2025, and Ireland only contributed for the first two months. On a comparable pro form a basis, we achieved a strong growth in the semester with revenues reaching 1,958,000.000 and representing an organic growth of 6%. And our EBITDA after Liza reaching EUR 1,163,000.000, implying organic growth of 8.1%. Our recurring levered free cash flow per share improved by 10.2%. We are successfully delivering on our push for more profitable growth with significant improvement in efficiencies, which Ramon will give you more color on shortly.

In terms of operational developments, we’re excited to announce the renewal of our agreement with ODDO in The Netherlands. The milestone reinforces Salinex long term industrial alliance with its clients securing the associated revenues for an additional fifteen years. It reinforces our commitment to delivering reliable, sustainable infrastructure solution that support innovation and growth across the sector. Continuing our effort, we have extended our infrastructure agreement with Telefonica to support the rollout of up to 3,000 RAM sharing DG POPs. This strengthens our partnership and reinforce our role in enabling fast, efficient network expansion.

From a capital structure standpoint, we have issued a seven year $750,000,000 bond with a 3.5% coupon. Additionally, we refinanced our $2,800,000,000 syndicated credit facility, ensuring our ability to meet future maturities and liquidity needs. I’m pleased to share with you another important development announced yesterday by S and P. S and P threshold for Selenex investment grade rating have been have become more tolerant, allowing us to have a higher debt ratio whilst maintaining the same rating. As a consequence, Salinexa has been upgraded to positive outlook.

This give us materially more financial flexibility. As of today, we have not taken any decision as to how this additional flexibility could impact our capital allocation strategy. This also be conditional upon agreeing a comparable level of flexibility with Fitch. During the second quarter, we successfully completed our share buyback program, a key initiative aligned with our capital allocation strategy. We acquired 24,064,404 owned shares, representing 3.41% of the share capital at an average price of €33.24 per share.

This decisive move reflects our confidence in the long term value of the company and demonstrates our commitment to enhancing shareholder remuneration. Moreover, this action reinforces our disciplined financial strategy and capital structure optimization while maintaining flexibility to invest in growth and value accretive opportunities. In summary, we believe our journey today has been marked by the definition of a clear road map towards profitable growth, solid commercial, operational and financial performance, strong governance and consistent and disciplined execution. Looking ahead, we are confident in reiterating our guidance and our ability to deliver on our key strategic targets. Moving to Slide five.

Let me start by reinforcing the foundation of our industrial value proposition, one that is clearly focused on maximizing long term value for our shareholders while positioning Cellnex as a trusted partner for our clients. Our business model remains underpinned by strong fundamentals and robust free cash flow visibility. First, let me start from the strength of our MSAs. We have very long term contracts in place with watertight all or nothing close renewal mechanism, CPI linked escalators and very limited churn concessions. More importantly, they provide predictability of future cash flows with anchor tenants securing the vast majority, being in approximately 70% of our revenues.

The strength of this contractual framework has been proven over and over again and more recently through renewals with major operators like Wind Italy, following its merger with Hutchinson, with the renewal of Telefonica in Spain, with the Vodafone and Hutchinson merger in U. K. And with the Mass Orange case in Spain. But I would also like to stress that we have other very important renewals for several of our secondary tenant contracts. Vodafone v two in UK, the so called Faris Agreement.

Sorry, I had a moment of blackout in the communication. Is it fine? Yes. Okay. Vodafone VMO2 m in The UK, the so called agreement Faros.

Iliad in France, we extended extra ten years. Orange in France, we extended the secondary contract for another twelve years. So not only we are demonstrating that our anchor contracts are rock solid, but also the second tenant agreements in our largest markets are also long term and robust. With these renewals and frame the importance of our industrial partnership spirit of constructive collaboration with our customer in each market, we have successfully increased the maturity and scope of service, preserving the underlying value of our contracts. I would also like to stress that we have only one renewal coming up for 02/1930, the terms of which have been already agreed and no other major renewals until 02/1935.

We have an important role as a key technological enabler. Our infrastructure enables the efficient use of spectrum as scarce and highly valuable resource. We operate in a sector with very high investment requirements and our specialized operation of passive telecom infrastructure allows our customers to focus on their operations. In particular, Europe continued to lag in five gs deployment and general network investments. Against a regulatory backdrop that appears more favorable to the existence of financially stronger operators capable of supporting the level of investment required to be globally competitive.

And we are strategically well positioned partner in the creation of that healthier telecom ecosystem, providing operators a neutral platform to develop the coverage, the capacity and the reliability of their network with the most rational use of resources. A key example is The UK, where the regulator did not oppose the Vodafone three merger. However, it did impose significant additional investment in network improvement. We also play a key role as enabler of new market designs. As an example, we made possible for Digi to enter the Portuguese market, providing around 4,000 collocation in a record of eighteen months.

After Digi was awarded Spectrum in Spain, we also enabled their expansion via network sharing agreement on telephonic equipments and the launch of ILED in Italy via combination of network sharing with wind and the building of dedicated infrastructure. To complete the picture on long term value orientation. As of today, we have contracted backlog of over $100,000,000,000 supporting very high free cash flow visibility. Concerns have been raised recently about our capacity to protect our revenues when we renew our contract. I stress that as of today, all and I underline all of our anchor agreements have been renewed maintaining the regional MSA prices.

The ODDO renewal announcement confirmed these thesis once again. Even more importantly, since it involves both the anchor and the secondary component of our business relation. We are also expanding the scope of our partnership as telecom infrastructure play an increasingly central role in European digital defense and energy strategy. Beyond connectivity, we are actively investing in ideation opportunity such as smart IoT solution, critical communication networks, tower used for drones, battery storage systems and many more. And we are also complementing the active network of our clients every time that a neutral host solution is more convenient and more feasible than an MNO proprietary network.

I refer to DAS and small cells, a growing market of specialized coverage, for instance, stadiums, malls, hospital offices, city centers with over restriction and others, in which we do not compete with our clients. We offer turnkey solution to MNO and business users. All of this is guided by a disciplined governance framework and a leadership team committed to long term value creation. In short, Sandnes continued to deliver resilient performance focused on profitable growth backed by very high quality and robust contracts, an industrial relationship with our clients, a strategically well positioned asset base, a transparent and disciplined governance structure and a clear strategy to deliver sustainable value for our shareholders. We are conscious that rumors on consolidation in the French market and potential impact on us have been the cause of more for much speculation, much more than needed.

And as such, I would like to give you some objective data points that will help you to understand the context. Sunlex is strongly positioned to navigate any potential market consolidation in France. We operate over 26,000 POPs sites and 31,000 POPs, generating $725,000,000 in tower revenues. Our business is underpinned by long term MSAs with SFR, Bouygues and Iliad as anchor tenants with the first renewal programmed for only 02/1937. And Orange as a secondary tenant running until 02/1937, 2045 with fixed escalator 1%, 2%, ensuring stable and predictable revenues.

Importantly, all of our secondary tenant contracts have already been renewed for between ten and twelve years. At the 2024, we also renewed a non anchor contract with Iliad Free Mobile for circa 1,700 colocation of Ivory Towers. The length of the MSA is ten years, and we have an individual contract for another twelve years. France is leader in land sharing with two major frameworks: the Croson agreement between SFR and Bouygues, a twenty year long deal covering around 65 of the population. In the case of Ivory, approximately 11,000 POPs, more than 50% are in run sharing.

And the so called New Deal Mobile, a government led initiative involving all the MNOs to expand four gs, five gs in rural areas. So in these run sharing areas, roughly twothree of the country, networks are already being deployed efficiently with minimal impact from any potential consolidation scenario. The remaining area, the so called dense area, are those where the impact of consolidation should be analyzed. They represent, roughly speaking, onethree of the country, and we have between 4050% of our POPs. When looking at the various consolidation combination between MNOs, it is important to take into account that, on one hand, the physical overlap between the sites and, on the other hand, the automatic increase in subscriber and data traffic after a potential combination, basically.

The operational ability to cancel site post combination is lower than the pure contractual terms. On MSAs, which account for 90% of the tower revenues, all or nothing clauses, a churn rate is allowed below 1%. And secondary tenants, approximately 4,700, contribute less than 10% of the revenues and have been already renewed for ten to twelve years. Finally, as seen in other markets like The U. K.

Post Vodafone three combination often led to increased network investment, a trend that would further reinforce Cellnex’s role as a neutral long term infrastructure partner, a factor that also result as a positive from the potential consolidation in France and the resulting improved credit rating of large client. Depending on the final outcome and how the assets are distributed among the other operator, Altice’s fragile financial situation today will no longer pollute market dynamic and credit risk profile will improve. All these elements make us an unavoidable and strategically critical party in any potential market consolidation talks. Our contracts with SFR cannot be transferred in parts without our consent. And as we did in the past, we are going to give our consent, swapping some collocation flexibility for the guarantee by the new tenant that the entire portfolio assigned will be duly priced and maintained for a longer period.

We have thus far demonstrated in Spain and in The U. K. Recent market consolidation that we are available to support the development of a healthier MNO ecosystem, introducing some short term operational benefit, while safeguarding and even potentially growing the value of our long term agreements, also standing to reap benefits from potential optimization that result from MNO consolidation. Therefore, in terms of the current environment, we support the favorable regulatory tailwinds around MNO consolidation in Europe if they favor behavioral remedies, namely investment to improve network quality and densification in opposition to structural remedies of the previous years. Adding all up, we believe that the impact of potential consolidation scenario in France is limited with potential upside.

Move to Slide seven. Further reinforcing the health of our strategic long term partnership in different markets across Europe and our continued efforts to enhance network infrastructure, I’m pleased to share with you two key renewal agreements. From July 1, DG in Spain started to use the spectrum it acquired as a remedy taker of the Mass Orange merger. Within this context, DG and Telefonica formalized a long term network agreement. Over the next sixteen years, Telefonica will provide the DG with both RAN sharing services and roaming on its network.

To support this transition and to enhance the overall network, Sinex and Telefonica have extended their infrastructure agreement. We will deploy 110 additional physical point of presence by Telefonica, significantly boosting their network densification, and we will activate up to 3,000 RAM sharing DG POPs over the next years. These efforts will not only increase DG networks capability, but also reinforce our leadership position in infrastructure sharing and efficient network development. In The Netherlands, we renewed key infrastructure agreements with ODDO, strengthening Cellnex position as a key partner to enable high quality connectivity and digital transformation across the country. Our contract is renewed for fifteen years.

It is CPI linked and maintains the revenues of our original agreement, ensuring long term cash flow stability and predictability. Together, these agreements are a testament to our strategic approach to the collaborative relationship we have with our customers, focusing on long term value creation, operational excellence and enabling our partners to thrive in an increasingly connected world. My last chart is on ESG. Turning to our ESG progress. This is an area where we continue to lead with purpose and measurable impact.

Sustainability is not just a pillar of our strategy, it is embedded in how we operate, how we grow, how we create value for the long term. I would like to highlight a relevant milestone in our decarbonization strategy this quarter, having achieved the ESO 50,001 certification for 80% of our energy use. Our efforts in responsible leadership continue to earn us global independent recognition, renewing best in class positions in the major ESG rankings and standing out at the forefront of the most sustainable companies in the world. Raymond, I drink a glass of water, and I leave to you the floor to you. It has been a bit longer than in the past, but I think that the MNO consolidation deserved a bit more space.

I hope I made clarity, but of course, I assume that more questions will come afterwards. Ramon, the floor

Ramon, CFO, Cellnex: is yours. Thank you, Marco. Good morning, everyone. I will now run through some of the main financial and operating metrics we are reporting for the period. Let me start reminding you as Marco did that our numbers this first half twenty twenty five are impacted by the change of perimeter as we have no contribution from Austria in the year 2025 and Ireland only contributed within two months.

This table gives you a clear comparison as where we are removing this effect from our numbers and highlighting the organic growth derived from our performance. As you can see, we continue delivering strong operating leverage. Revenues grew 6%, our EBITDA 7.3%, the EBITDA down eight percent and our recurring level free cash flow per share 10%. Let me remind you as well that our recurrent level free cash flow per share has improved not only as a result of the improvement of the recurrent level free cash flow, but also as a result of the share buyback we undertook during the first half of the year when we are we bought 24,000,000 shares. Moving to our financial performance on Slide 11.

As I mentioned, our revenues increased 6% on organic basis and the adjusted EBITDA by 7.3% compared to the same period last year. This growth has been driven by the four business lines we operate and in particular, by the towers and the fiber connectivity and housing services. Our EBITDA increased 8.1% on the same basis, highlighting further growth in operating leverage and enhanced profitability. As we will mention later, we have accelerated significantly versus last year, the land efficiency program helping us improve the EBITDA. In terms of cash flow generation, our recurring level free cash flow amounted to €332,000,000 with growth set to accelerate throughout the year, thanks to the low validation of guide items below EBITDA, as I will explain later in more detail.

As I said, the recurrent level free cash flow per share has improved 10% on the year as well. Moving to our key operational metrics, we have added 2,233 insights in the context of our build to suit programs, mainly in France and Poland. Our net collocations in the first six months reached five seventy eight impacted by the nine seventy four withdrawals from Mazorange in Spain, as you know, negotiated in the context of the merger. Collocations have been well balanced by country, improving our tenancy ratio to almost 1.6%, 1.59%. As regard to our investments in efficiency to optimize our asset base and drive operational efficiency, we have undertaken a combination of landside actions, acquisition, upfront payments, contract renegotiations, totaling EUR 115,000,000 in the first half twenty twenty five.

This compares to the EUR 93,000,000 we did last year. So there has been an increase of 23.7% that reflects the increased focus on land efficiency after the creation of Finland. Moving to Slide 12, The 2025 has seen another period of consistent commercial performance with POPs growing 4% compared to the same period last year. This is explained by the net collocations contributing 1.5%. It would be 1.8 if we were to exclude the impact of the Majora’s in Spain.

As a reminder, the new contract signed with Majora’s in Spain gives our client network flexibility in the short term in exchange for a single longer contract until 2048 and additional services to be provided by them. As per this agreement, no impact in revenues is expected until 2026 despite the churn seen in terms of COGS this year. Nevertheless, the impact expected for 2026 onwards will be compensated by new business. As discussed by Marco before, regarding consolidation, it is another example of how we have been managing the various consolidation cases to date without a long term impact to Cellnex and the value of our contracts. Moving to the next slide, we maintained strong organic growth at 6% year on year.

As you will know, this is due to various factors like the price escalator and CPI from our contracts, the collocation we’re undertaking on the existing sites and the new build to suit that we are building mainly in France and Poland. To provide a clearer picture of our performance in the period, excluding the impact of the change of perimeter, on this slide, we are providing our organic revenue bridge on a pro form a basis. Let’s look at the data by business line. As you can see from Slide 14, our tower business that represents 80% of our total revenues is growing organically at 5.2%, driven by escalators and CPI, collocations and build to suit. As of June 30, all price increases from the contracts have already been applied to all our customers in the year and we have excluded comparison purposes, Austria and Ireland from the 2024 base.

Moving to the next slide, we can see comparable performance of our other business lines, which continue to show healthy organic growth. In fiber, connectivity and housing services, revenues grew by over 20% year on year. A key contributor to this performance is the NextLook project in France, which exemplifies our ability to deliver advanced fiber infrastructure tailored to high density and high demand settings. Thus, the small cells in RAN saw growth of around 2.8% by densifying networks and enhancing indoor coverage. What’s driving this performance is the growing demand for smart infrastructure connectivity, particularly in high traffic environments like stadiums, such as Etihad Stadium and Riyadh, Air Metropolitano, transport such as the Metro Sociedad Grand Paris, airports such as Milan Malpensa and Milan Dinate and hospitals such as Bergamo.

These deployments demonstrate our ability and technical expertise to adapt and deliver value in mission critical scenarios. We could also add to this list Metropole, our joint venture within the Metro de Madrid, which operates the DAS service for the MNOs in Madrid underground, now developing the five gs update. In broadcasting, revenues increased by 2%. This cost efficient business line operating mainly in Spain and The Netherlands continues to generate strong cash flow and offers long term visibility, thanks to its mature and stable structure. If we move to Slide 16, we keep improving all our cost drivers to drive efficiency.

As part of the strategy set out on our Capital Markets Day and our continued focus on industrial excellence, our main efficiency ambition relate to asset rationalization, cost base optimization and group wide productivity. Again, considering pro form a numbers, the reduction in headcount is part of our broader strategy to optimize resource allocation, enhance productivity and focus on core activities. In June, it took place the first phase of the recently announced of the Dundance Program in Spain, which is implemented over the twenty twenty five, twenty twenty seven period. This plan will also result in discontinuing certain operational and maintenance contracts, which have a nil or negative EBITDA contribution. In repairing, repair maintenance costs following the positive performance last year, we continue to see good progress in the period, representing a 1.6% decrease per tower and the evolution of our general expenses translated into a 4.4% decrease per tower.

These trends reflects our continued focus on lean workflows and disciplined cost control. Finally, on leases, we have been able to reduce costs by 1.1% per tower, reflecting good momentum on our land acquisition plan along with rent negotiation and cash advance initiatives, which are progressing well as discussed before. Now let’s take a look at our debt maturity profile on Slide 15. Be aware that this page is updated as of today, June 30. All twenty twenty five maturities have been either repaid or refinanced.

As a result, there are no remaining maturities left in 2025, while we still remain with a strong cash position circa €1,600,000,000 Regarding our debt management, during the first half twenty twenty five, we have executed the following transactions. We secured a new €625,000,000 syndicated term loans with a margin below one percent as communicated in our first quarter results. In May, we successfully completed a €750,000,000 bond difference. Thanks to active interest rate management through the use of hedging instruments, the effective annual cost of these refunds was reduced by more than 10 basis points. The coupon of the bond is 3.5%.

Finally, in July, we refinanced our main syndicate credit facility, increasing its total amount from €2,500,000,000 to €2,800,000,000 This refinancing not only extends the maturity to 02/1930, but also includes two one year extension options, which could push the final maturity to July. It has been supported by 26 financial institutions. This is essential for maintaining and strengthening Telenex long term liquidity position. We have a robust and well structured capital trends. Liquidity remains strong with more than EUR 4,700,000,000.0 of liquidity available, 1,600,000,000.0 held in cash in order to cover upcoming maturities.

78% of our debt is fixed rate and short term maturities have been proactively managed with average maturity now outstanding at four point five years and our average cost of debt of 2% is expected to increase only marginally in the next years. As Marco mentioned at the beginning, Standard and Poor’s just revised their outlook to positive, reflecting the improvement we have been doing over the past two years on our capital structure, but also predictable cash flows and higher barriers of entry of the sector. Finally, on the last slide, we are confident in reiterating our 2025 outlook and all our public financial targets, reflecting the resilience of our business model and solid execution across all our markets. We now remain at your disposal to answer any questions you may have.

Marco Patoano, CEO, Cellnex: Thank you, Ramon. Thank you, Maria.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So in terms of the lineup of questions, our first question comes from Andrew Lee from Goldman Sachs. Could I ask you to pronounce your questions clearly so that we can all understand them in the room?

Marco Patoano, CEO, Cellnex: Thank you, Andrew. Good morning.

Andrew Lee, Analyst, Goldman Sachs: Yes. Good morning, everyone. I had two questions. Firstly, just on the balance sheet and cash allocation. And then just secondly, if you could give us an update on the Swiss data center potential asset disposals, where are we with those processes?

On the first question on the balance sheet, you obviously mentioned the positive update from S and P. Just wondered if you could talk through with a bit more color how that has affected, your thinking about your optimal gearing for now, and how that thinking has evolved. I think you’ve talked about a five to six times kind of range of leverage that you’re comfortable with. Is that rising now? And any kind of color you could think on how you’re thinking about that would be really helpful.

Also, just secondly, in terms of acquisitions or potential capital allocation, is it still right to assume that it’s more likely you’ll be spending money on shareholder returns than M and A? Thank you.

Marco Patoano, CEO, Cellnex: Yes, Andrew. Thank you very much for both the questions because I think it’s two the first two hot topic of the day. Well, the update of the S and P has been a long, long, long discussion we have been having with the rating agencies, meaning that the strengthening of our balance sheet and the predictability of our cash flow is really remarkable. If you add the industrial our industrial position, the differentiation of the portfolio, if you put all in the basket, what you see is that we have more credit capacity than what was originally allowed. Now the conversation with S and P, I make the long story short, is de facto a rating improvement.

But it has not been shared as of today by So we are having similar conversations with Fitch in order to understand where is the comfort zone of Fitch. And therefore, the entire work is not done. What is the takeaway? The takeaway is that our strategy discipline has been rewarded by the rating agencies. Point number one, we have more flexibility.

Point number two, this flexibility has to be confirmed by Fitch. So as of today, we have the flexibility only from one of the two rating agencies, and our view doesn’t change. So it’s good to have more flexibility in the balance sheet. But as of today, we stay committed to our strategy, to our financial discipline. And going forward, with the Board of Directors, we will understand if and how to use this financial discipline if and when agreed by both the rating agencies.

With reference to the asset rotation. Well, to say the truth, we have very little to share with you. The potential transaction, both in France and Switzerland, are still in the on the desk of our M and A guys. So we have, as of now, nothing to share, and we will provide you, as usual, update as soon as we have reliable information. Let me add a couple of points.

We stated tens of time, but I will never be tired of saying again. We are very disciplined in our approach to the capital allocation, and every decision we make are based to the maximization of the shareholder value. So what I mean is we are not forced to do nothing. We have a solid capital structure, as I said, first, reinforced yesterday by the upgrade of S and P. We have committed to assure the remuneration, which is not based on further disposals.

So this is what we already said. We said that the original $500,000,000 have to be read as a new level of $800,000,000 So this is nothing new. But again, this is not based on any further asset disposal. And as soon as we have more information, we will share with you.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So moving on to the next question. It comes from Akhil Dattani from JPMorgan.

Akhil Dattani, Analyst, JPMorgan: Hi, morning. I’ve got two questions as well, please. Firstly, Marco, as you said, a helpful slide on the French market structure and what’s going on. I had a couple of clarifications just to make sure that we’ve understood, that slide properly. You’ve mentioned in the slides that, and in your comments that the variables that could be relevant would be the overlap between the anchor sites.

So I wondered if maybe you could just comment on what that is and the way you think about the relevance of And then you also mentioned offsetting that the opportunity in the rural areas from once you have stronger players potentially seeing more investments in that? Again, could you help us understand and quantify how you think about the scale of that, just so we understand the puts in and terms of how we think about that? Then the second question was just around the asset sale process. And it’s a bit of a bigger picture question rather than specific to these assets. When we stand back and look at the industry as a whole today, it feels that the last few years public markets had derated infrastructure assets, but private markets were still paying much richer multiples.

This year that seems to be eroding a bit. If I look in the fiber space, there’s not been that many transactions in towers. But looking in the fiber space, these multiples have come down. And we saw earlier this week, there was the French transaction, on the infracos, between Bouygues and SFR. And the implied multiples of that looks quite low as well.

So can you just help us understand when you look at the buyers out there in the private equity world, do you think there is a bit of, let’s say, tension there in terms of just where they’ve been paying and what’s going on? Or do you think that that’s something we shouldn’t read too much into? And and I guess with that, did you look at InfraCo’s at all, or was that not enough that you cared for? Thanks a lot.

Marco Patoano, CEO, Cellnex: Good. So thank you for both your questions. On on the French case, it’s you you you got perfectly the the two points that I wanted to underline in the chart. So if you allow me, I swap the order of the answer. So I start from the rural.

As of today, the rural coverage in France is a mix of run sharing and collocation. So the number of duplicated towers I mean, duplicated towers for me is you have two sites, two infra, where, technically speaking, with a higher collocation rate, you can serve the population with only one tower. Okay? The number of duplicated assets is relatively limited. Why it’s relatively limited?

Because SFR and and Bouygues Telecom are run sharing by design. And Orange, after the, let me say, the first phase of network deployment, they started using colocation more and more. They have their tote their totem tower, but they started to use colocation more and more. We have several thousands of colocation requests from Orange in rural areas. So it’s a it’s a it’s a big market.

As you know, France is more than 500,000 square kilometers. France is big. And the more you go in the deep rural, the more you feel that the let me say the voice coverage is okay, but the data coverage is not okay. So in the rural, the possibility of a, let me say, network rationalization, I would say that the network is fairly rational as of today. So impact, modest.

Upside, material. The problem of the upside is that the original build to suit criteria, so the one that was, let me say, an extension of an m and a transaction, is not actual any longer. So if someone asks us to replicate the old build to suit agreement, well, the the answer is that those agreements are not replicable anymore. In the urban areas. In the urban areas, I want to share with you so before talking what what how we see France is what we see happening in Spain and in England.

So it’s more moving the the pieces on the chessboard than canceling. Why? Because in the dense urban areas, putting together two customer base increased dramatically the capacity needs of a network. So the the risk is that you have the coverage, but you cannot access to the network. Or you have such a crappy service, and sometime in London, you have some examples, that you see that the operator need to do something.

What we see in London, for example, is a super strong acceleration of of the densification by Vodafone three. So what we assume is on the one from on the one hand, there are the contracts. The contracts allow my client to move a limited number or sorry, to cancel a very limited number of pops. But I know that my client needs more flexibility. So I don’t want to impede the flexibility of the client as we did in in Spain.

We are favoring the flexibility, but with no financial impact, not even limited, with no financial impact. I think that this is going to be the case also in France. The contract is designed in this way, the secondary. So what has been super important, possibly our fault, we did not we have not been loud enough in the past. We’ve been working a lot on the secondary contracts.

We renewed the secondary contracts for ten, twelve, fifteen years. With Telefonica renewed a very long secondary contract, very long. So this is this is hope I I gave you the answer. If not, please tell me, and I can deep dive for another couple of hours. On the asset sale, you are touching a very, very delicate point, which is, you know, the assets are basically the same assets.

The point is, did something change on the in the infra fund environment? So I would say that it has been tough for them to raise new funds. If you take super successful firms, they struggle to raise new funds. And therefore, in order to be more competitive, they need returns that are not the traditional infra returns. If you what is the expected return on capital of an infra three years ago?

It was a mid high single digit. It was something 7%, 8%. Today, this return on capital is not there. So I don’t think that the problem is on the quality of the assets, on the quality of the cash flow, on the predictability of the cash flow. I think that the finger point on fragility on our business model possibly is a bit overestimating the downside risk.

When I hear talking about 3%, 4% risk, I think that this is too much. So it’s it’s not about us. I think it’s more about the the the fundraising of of the private market.

Akhil Dattani, Analyst, JPMorgan: That’s super interesting. And Marco, just on InfraCros, was that an asset that you looked at as a company?

Marco Patoano, CEO, Cellnex: Sorry. Sorry again?

Rohit Modi, Analyst, Citi: The

Akhil Dattani, Analyst, JPMorgan: InfraCros transaction that Bouygues and SFR announced this week selling their towers, I just wondered if that was an asset that you looked at as a potential acquisition.

Marco Patoano, CEO, Cellnex: Oh, yeah. We we have been looking to the asset. The problem that in France, I have a a strict antitrust limitation. And then there are some specific elements that did not fit perfectly with us. So we decided to to exit from the process fairly quickly because useless to to spend the time and to use my resources to an asset that we were not interested in.

Akhil Dattani, Analyst, JPMorgan: Great. Thanks so much for the answers.

Marco Patoano, CEO, Cellnex: Thank you. Thank you, Akhil.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So now moving on to the next question. It comes from Andre Kavatek at UBS.

Andre Kavatek, Analyst, UBS: Hi, everyone, and thank you very much for the presentation and especially the more detail that you gave us on France and other contracts. So I’m just going to stick to the theme, if I may. So just wondering, you highlight the collocation renewals for Iliad and Orange. I’m just wondering what the collocation situation is with SFR and Bouygues in the case.

Maria Kehapaten, Head of Investor Relations, Cellnex: Andre, can I interrupt you? Could speak maybe speak a little bit more slowly and and clearly? It’s a bit difficult to hear you in the room.

Marco Patoano, CEO, Cellnex: It’s a it’s a bit disturbed. The line is a little bit disturbed. So if you speak a little

Ramon, CFO, Cellnex: bit slowly.

Marco Patoano, CEO, Cellnex: Yeah. Better. Better. Thank

Andre Kavatek, Analyst, UBS: you. Okay. Thank you. Apologies for that. So I was wondering on the slide on France, so you are highlighting the renewals that you’ve done for Iliad and Orange.

I’m just wondering what the collocation situation is for the agreements with SFR and Bouygues because those are potentially even more important. And on that theme, if you can maybe expand a bit how the average secondary tenancy looks like in other markets because I think maybe not many of us were aware that some of these contracts are actually this long or that you are renewing them at these lengths. If you could talk a bit more broadly about the general secondary contract landscape? And then second question would be in relation to the deal that you were talking about with Phoenix Tower. What kind of impact are you seeing, if any, on France and Italy, specifically, where Phoenix has done some deals and is becoming a bit more of a weight in terms of market share?

So is this having maybe an adverse impact you know, pricing in these markets? Any color on that would be very helpful. Thank you.

Marco Patoano, CEO, Cellnex: Okay. Sorry. The the the communication was still, let’s say, mid quality. So if I don’t if I’ve not understood properly, please correct me, and I will follow-up. Colocation in France was your first question.

So collocation in France, we have to split two different concept. One is collocation coming from run sharing. So collocation coming from run sharing is entirely SFR Bouygues. They have this network sharing called Kruson. It works in all the countries except the high dense area.

And the contract for us is fairly protective because the contract clearly says that the fee remains unchanged in case the run sharing agreement is not active any longer. So they wanted to integrate the network. So having a single network instead of run sharing, be my guest, it doesn’t change a penny of revenues. The On the secondary tenant contract, so point number one. The three operators that are that have MSA with us at the time of the portfolio acquisition, very important build to suit agreements.

So as of today, there is a significant number of sites, individual sites, tenancy one, with most of them. So the second tenant is something that has been used particularly by Iliad and by Orange. Iliad and Orange have quite long contracts. They are priced let me say, the price is a market price, let’s say, approximately 50% of an anchor fee, more or less. We are talking about about 3,000, 4,000 pops and excluding the run sharing, so on top of the run sharing.

And we agreed with them two things. One is the extension of the duration of our contract. As always, there is a modest respiration rate that is quite modest, well below 1%. And we agreed on a ten year on a ten year duration contract with with CPI escalators, so the the usual one. We have agreed with them.

We have a pipe of further collocation requirements, which depends mostly on permitting. So the the bottleneck today is represented by the permitting. So on the pricing of the secondaries, I think I gave you the answer. If I understood well, the second part of your question was again on the deal of the Corozone Tower. Is it correct?

Ramon, CFO, Cellnex: How it impacts the PTI?

Marco Patoano, CEO, Cellnex: Yes. So I think that the the company who went for the so let me make it one step one step back. The tower market in France is pretty fragmented. So if you take the number of tower players, it’s Cellnex, Totten, Phoenix, TDF, American Tower and there was Crozon and there was so it’s too way too fragmented. So the fact that the market the tower market go in the direction of the consolidation, it’s a net positive for the French tower market because you avoid to have marginal operators who tend to act irrationally in order to get more scale.

Tower business is scale business. So if you don’t get scale, at the end, you do something to get the scale, which can be something not good for the market because you can start touching the prices in a rational way. So we have limitations in acquiring big portfolios. When we made the last acquisition, the antitrust gave us remedies that ended with the sale of several thousand towers, approximately 3,000 towers, which is the base of the Phoenix Tower portfolio. So if you ask me, is 3,000 towers an optimal sizing for getting the scale?

The answer is no. But with 3,000 towers, you don’t get all the benefit of the scale. So it’s absolutely natural that you have, on one side, a market too fragmented, on the other side, someone with good funding capacity who wants to get more scale. So I think that what happened is natural. The market goes towards a more consolidated tower market, which means a more rational tower market, which is good.

And it was a portfolio too big for us for entering without another nightmare of you buy 10 sites and you have to sell five. So it’s my team in France has so many things to do that I don’t want them to be in this. I hope I, Andre, I answered your questions.

Andre Kavatek, Analyst, UBS: Thank you very much, Marco. If I may, well, maybe more directly on the on the SFR and Bouygues situation. So so, obviously, there are two MSAs. There is the network sharing, then what is the exposure to, say, less protected trade secondary tenancies, if any?

Marco Patoano, CEO, Cellnex: The yes, we have two MSAs because we have two MSAs, one with SFR and one with WIG. But the two MSA on the run sharing component are cloning, they’re closer one than the other. So believe me, it’s even less than modest, the impact of the potential. If the consolidation is on the network is Bouygues with the Zafar, I open a bottle of champagne.

Ramon, CFO, Cellnex: Thank you

Maria Kehapaten, Head of Investor Relations, Cellnex: So very thanks for your question. So moving on to the next question it comes from Rohit Modi from Citi. Rohit, if I could ask if you could also ask place a question clearly so that we can we can understand in the room. Sure.

Rohit Modi, Analyst, Citi: Thank you, Maria. Two questions from my side. One is a follow-up on the French consolidation. You mentioned about limited impact from the French consolidation. Does that mean that the limitation from agreement you’re ready to let go some of the revenue?

Or that’s a combination of some of the some of the revenue that is already at risk when consolidation happens as well as, you know, some of the revenue might let go from, you know, for a for a higher a higher duration? Second question, is around the capital capital structure. I understand you mentioned that, you know, it’s it remains as it is. But I’m just trying to understand what happens if Swiss sale and French tower sale doesn’t happen, and and you you have a bandwidth from S and P, but you still need, you know, a fridge, you know, approval from fridge. If fridge doesn’t give approval, is there any change in terms of your shareholder returns for next year?

Thank you.

Marco Patoano, CEO, Cellnex: Cool. I leave to the CFO the capital structure because, otherwise, I don’t understand why you pay the salary. And and I take the one on the on the on the friends. Well, I always refer to limited impact. When I speak about France, I would say that my base case is no impact.

K? This is my base case. Why I’m so positive? Well, point number one, the quality of the contracts we have. Same as we did in Spain.

In Spain, we traded operational flexibility with two things, with revenue stability and contract duration. Now in France, to say the truth, contract duration, contracts are fairly long, very long. We’re well beyond 02/1940, so I’m not particularly worried. But what is important to me is that since it is the contracts are all or nothing, what we don’t want is the fragmentation of the contract. So the contract do you want do you want to split the contract?

Okay. It aggregates to an existing contract with a total all or nothing at the renewal date, which means that before you had $11,000 $12,000 okay, you buy a portfolio of five, fantastic. At the renewal, we will discuss about order nothing of 16,000 rational. It’s it’s a win win. So my base case, Roshan, is that is that sorry.

Right. Is that we have these this case, I’m I’m pretty confident. What is what is important is I think that everybody understands that you cannot discuss about in market consolidation without having at the table such an important player as Cellnex, who is partner of choice of three out of four of the players in the country. So this is where we stand. Ramon?

So on the capital structure, Rohit, you recall, when

Ramon, CFO, Cellnex: we had our Capital Markets Day in March 24, we committed to various things. The first one was to be investment grade. It is something that we already said before that date, but we achieved on that date. We committed to be five to six times levered. Being investment grade meant being below seven times with Fitch, below seven times with S and P.

And we also committed to start shareholder remuneration in the year 2026 with a €500,000,000 dividend. What has changed since then until today? What has changed is that SMB yesterday because of the improved outlook, they have given us more flexibility. But Fitch as of today remains exactly the same. They have not changed anything on their side.

We remain with the limit of seven times. This means that to be within their seven times, we still need to be between our five and six times. This is not changing for today. Our commitment to be investment grade has not changed. We remain exactly the same.

And from a shareholder remuneration, that has been a big change. So as you know, we have the €500,000,000 starting in 2026. And what we have done is accelerating this shareholder remuneration. We moved shareholder remuneration from EUR 26,000,000 to 25,000,000 by doing a share buyback, a size of EUR 800,000,000. And what we committed as well is that for the year 2026, the shareholder remuneration between dividends and share buybacks will not be below the EUR 800,000,000 that we committed.

The different divestments of Switzerland or France do not change that picture. This means that what we have committed, the same like we did in the Capital Markets Day, each without further disposals or other inorganic things. This means that the €800,000,000 committed for the year 2026 remains whatever happened with the two transactions of France and Switzerland. If the transactions were to happen, we will reconsider them the shareholder remuneration for the year 2026. But the rest is not changing.

Maria Kehapaten, Head of Investor Relations, Cellnex: Thank you. Sorry, just in the interest of time, we’ve still got quite a long list of questions and it’s we’re already getting close to lunchtime. So what I suggest is we limit the amount of questions to two without follow ups. And then obviously, the IR team and the management team are available afterwards if we need to if you need further detail. So we’ll move on to the next question, which comes from Nick Lyle from Berenberg.

Nick Lyle, Analyst, Berenberg: Yes. Good morning, guys. Can I just ask one about the rental levels, please? I’m assuming that the SFR rents for the urban sites that we’re talking about are high. So could you just talk about the risk that the rentals are higher than averages in France and how you offset some of that?

And also, how much control do you have over the timing of the revenue impact and the short term impact versus longer term gains, for example? Could you talk to the risk of that as well, please?

Marco Patoano, CEO, Cellnex: Yeah. Yeah. Yeah. Yeah. The the topic of the prices in France is is a no issue.

So the the prices are fairly aligned in in France, which it’s it’s the market. It’s the dynamic of the market. So and and in France, it’s super interesting because prices are further aligned, and the number of operators are many. The tower operators are many. So it means that there is a market, and the market price different object, more or less the same price, which is which is okay because because you the you have not an incentive to move because you have to trade between different price expectations.

But as I told you, it’s a super good example because the French tower market is possibly the most fragmented in Europe, prices are not that different. So I don’t expect the pricing to be particular issue in France if a structural change in the market happens. By the way, everybody consider that the structural change happens tomorrow, which I honestly have to say that it’s not that obvious, okay? So we are just discussing about a case, a possible potential scenario. And you all know that the transaction is monster big and monster complex, and nobody asked to the French government what they think about.

So it’s but okay. Let let’s go on. So how do I think short term versus long term? I think that the short term, in case of a of a redesign, the short term is a lot of a lot of activity for gaining efficiency via rationalization. What I mean is if you are a CTO, for you, can be, I get the same quality and I spend less or I spend the same, I get more quality.

So in an integration, especially given the behavioral remedies that the authority are adding to the authorization, are putting for the authorization, this is very valuable for CTO. What we see in both in UK and in Spain is that after a while, and I would say less than one year, so much shorter than what we believed, same CTO come to us and say, hey, guys. The the pure rationalization is not enough. Why? Because because you put together two customer base that are normally very different with for example, when you take Spain, Mass Orange and and MassMovil and Orange were very different characteristics of the client in terms of age, in terms of mobility, in terms of data consumption, in terms of many things.

And so when you have to serve a more complex customer base, you need more. So our experience is request number one is flexibility, which drives efficiency. In a relatively short period of time is a much deeper analysis the short term needs, and then we work on the long term on the long term, which is five g penetration, more data, etcetera. So the long term doesn’t change. What is surprising us positively is that we thought that the short term cannibalization would have been higher than what is really.

And the two cases, Spain and UK, are a test case. Would say it’s not theory. It’s a test case. By the way, the theory, I was convinced it was worse than the reality. I hope I answered, Nick.

Nick Lyle, Analyst, Berenberg: No. That’s great. Thanks very much.

Marco Patoano, CEO, Cellnex: Thank you.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So now moving on to Fernando Cordero from Banco Santander.

Fernando Cordero, Analyst, Banco Santander: Hello. Good morning for taking my two questions. The first one is on the on the secondary tenant contracts. And in that sense, I agree with you, Marco, that you have been also vocal on your strategy for renewing the secondary tenant contracts. You have explained the situation in France.

But I would like to understand which is in your current approach when renewing those secondary term contracts? So for example, we have won’t begin in Italy with Gilead and so on. So to understand again, which is your strategy when renewing the secondary term contracts? And the second question is, I would say, more in detail, but related with one of, let’s say, the potential optionalities in the sector, which is run as a service. I guess, would like to understand why in Poland in the second quarter, we have seen a quarter on quarter decrease in run as a service revenues, particularly considering that this is the, I would say, the best of concept of this business line.

Okay. Thank you.

Marco Patoano, CEO, Cellnex: Yeah. The the Zeguro case is paramount for understanding why the secondary tenant contents are important. You know, the the the Spanish case is is one clear example of testing the robustness of of an MSA contract. How I look at the secondary tenant? For me, it’s an anchor contract differently from The US.

An anchor contract is made with with an industrial component and with a financial component. Okay? So the industrial component is what you price the secondary in the secondary tenant. And the financial component is what is priced in the anchor contract. So it’s not true that I can that I can and and this is, by the way, the reason why market by market, if you look at how different tower operator price the secondary tenant, Yes, there are marginal difference because in operations, you can be better or worse.

But by the way, a larger operator is more efficient than a smaller operator. And so we have good pricing capacity. So our strategy is we don’t compete on secondary tenant on price. What we do is we compete on service. We are my Chief Operating Officer has prepared a deck of SLAs that we ensure to the client, which are top of the industry.

We are pricing rationally. So the way, again, is to have good contracts with good quality. Depending on the case, there are tower adaptation that we can absorb or we can agree with the client that they will pay for, and this will also influence the price if I have to absorb the adaptation cost, possibly it’s higher. So that’s it.

Ramon, CFO, Cellnex: Poland. On the other topic, Fernando, on Poland, the deviation that you have is not coming from the one as a service per se. It’s coming from the lower DAS activity. You know that we have DAS both as a service but also as trading. And last year, Poland had more activity on trading.

This year is less activity on trading. If you want later on with the IR team, can get further details so that you can try to understand the variances.

Marco Patoano, CEO, Cellnex: I hope it’s clear what is the difference between the trading activity.

Ramon, CFO, Cellnex: I mean, when we talk about trading or that as a service, that as a service is when we do execute the CapEx, so you have long term revenues coming from the contract where you are charging not only for the assets, but also for the service that we give to them in terms of maintenance and the management of the tool, etcetera. And in the case of the DAS as a trading, what we do is we buy and sell as a trading activity. So you have the cost going through the P and L, not as a CapEx. And then we just invoice a lower amount going forward that is linked to the maintenance of Yes.

Marco Patoano, CEO, Cellnex: We make an engineering activity for a client.

Ramon, CFO, Cellnex: So that’s the difference. In terms of the numbers, you can check later on with the team if you want.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So now moving on to Rochanne from Deutsche.

Rochanne, Analyst, Deutsche Bank: Hi, good morning everyone. I’ve got two questions please. Firstly, just on France and very quick follow-up. Whilst we’re clearly seeing how the situation evolves, think some of the operators have said discussions are taking place. Have you already been involved in these discussions at this stage?

And a lot of talk has been around the top line implications. France remains the one market where you have the biggest build to suit. Is this where you can really, at this stage, look to combine this build to suit, something which you’ve talked about before? So rather than just having the top line benefit, you’ve clearly got the material benefit at the OpEx level and those higher tenancies. And second question, more operational on the Landco.

I think previously you’re running at around 900 site actions a quarter. Now whilst you’ve given the absolute spend, are we still looking at that 900 level? Or have any of the pricing dynamics changed there? Thank you.

Marco Patoano, CEO, Cellnex: Okay. In France, we had separate conversation with all our clients, including SFR. But as far as we know, there is not a a common table, so we cannot be invited to a table that is not there. So what we told to everyone and the and the answer we got from everybody is that the day that this table will be up and running operationally, Of course, we are an important element. You were mentioning the build to suit.

Well, of course, the build to suit should be understood. But the build to suit, if you do, you do. If you don’t have the CapEx, then you can allocate the CapEx to other things. So the bid to suit per se are a good business. As of today, making a big average, let’s say, that is like buying the towers at 15 times, so it’s a good business.

But I don’t want to to build useless towers. So if my client doesn’t want, I save the CapEx, and I use the CapEx differently, or I give the CapEx back to my CFO who is happy like a baby.

Ramon, CFO, Cellnex: So on the the land, if I may, it is true that until last quarter, we were reporting the number of actions we put. On this quarter, you have seen more focus on the value of the action because it makes more sense to look at the value. And we will come back if you needed to put the number of actions. Number of actions have increased slightly. We have done in the first half of the year 1900 approx, a bit less than 1900.

I think the first quarter we were below the 900. I mean that you have increased a little bit, but it is still not significant. But you have seen that also the value of the actions have been a bit higher. So we have increased the land activity by 23%, reaching €115,000,000 in this first half of the year.

Marco Patoano, CEO, Cellnex: Yes. What we can add is that average price has not changed. So the activity of the land aggregator is not hurting us in terms of return that we can get from the acquisition or long term renegotiation of the contracts. And very importantly, we are finally lending to a more quiet scenario in France and allow me to stop here.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So now moving on to Octavio Adorizio at Bernstein.

Marco Patoano, CEO, Cellnex0: Hi, good morning. For the business of time, let me ask a straight question on numbers. The first one is, if you can give us a bit more granularity about the agreements you announced today with TAF and DG. You didn’t make any change to guidance, so I suppose that either the contracts are negligible or is back end loaded? The other one on the numbers is on the CapEx.

The bulk of the growth CapEx still in site adaptation. Now from memory, it’s a lot to do from upgrading some of the towers you bought to multi tenancy. So if you can provide an update on the ratio of your tower portfolio that’s already been upgraded to multi tenancy. And what’s the current upgrade pace you are going at the moment? Thank you.

Marco Patoano, CEO, Cellnex: Okay. I answered the first. So the DG case, the run sharing fee is a demultiplicator of a second tenant fee because you don’t have the physical assets, so you use the space and the electromagnetic. So you’re using my capacity to host in terms of potential revenues, but you are not using physical space. It’s a plan that is why we didn’t change we didn’t change because of the activation of the 3,000 run sharing would take, I would say, something between two and three years.

But this is the the the the total contract value is not negligible. It’s it’s three digits. So it’s it’s not net negligible, the total contract value. But the rollout, you know, infrastructure have have the the pain point of that between the moment you agree and the moment you execute, there is quite some engineering to do and and some bottleneck also with the with the equipment providers that have to do activity. You have to change the software where you have to do things, but it will take a little bit of time.

But the total contract value is not negligible. On the second, I leave it to Yeah. On question,

Ramon, CFO, Cellnex: as as you clearly expressed now, we have in the in the CapEx this tower expansion CapEx that includes the fact of reinforcing the towers in order to have multi tenant towers. As you know, when we bought some of the portfolios of towers, some of the towers were not prepared to hold multi tenants

Marco Patoano, CEO, Cellnex: are having to do. Can can I expand on this? Because I think it’s important. Please consider that in Europe, most of the tower have been built by the operator themselves for hosting their equipment in a two g, three g environment. So when you take the tower, the the the the oldie one, the oldest one, you don’t have a big mast that can you can put an elephant on it.

It was a a relative thin animal that was able to resist fifty, sixty, 70 kilos. Now if dual tenant five g were hanging at 30 meter, were hanging a ton with approximately 15 square meters of wind effect. So you have to imagine that in a windy day, you have to avoid that your tower goes three miles away because because it starts flying, which is what happened in Portugal two months or three months ago. A windstorm took seven of our tower and moved nicely sort of 200 meters away. Thanks God, we did not kill anyone.

This is very technical that comes from the origin of the industry in Europe. And we are doing not because we like it, but because in order to make the collocation, you have some technical activity that has to be performed. Sorry to to have misjuncted.

Ramon, CFO, Cellnex: I think super clear. And then it depends very much on the country. There are countries Right. That have already done most of the works that need to be done, others are still needing to do. So it depends very much on the country.

If you want, again, with with the AR team, we can give you more color on a country by by country basis where we believe it will be heading over the next years.

Marco Patoano, CEO, Cellnex: Yes. Correct.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So I think I think that’s it. I don’t think we have anybody else.

Marco Patoano, CEO, Cellnex: I thought there was James.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. No. So yes. We do. So so the last question comes from James Ratzas.

So James, you’re the last question before for us at lunch. So and the holidays. So please go ahead.

Akhil Dattani, Analyst, JPMorgan: Good. Thank you. Thank you very much. We’re gonna keep it brief. I was just doing a little back of the envelope calculation, Mark, on what you were saying about the Digi RAM sharing agreement to make it a Yeah.

A three digit value over eight years, that would seem to imply that you’re getting about €6,000 per site from Digi RAN sharing. Is that around the right ballpark that you can get?

Marco Patoano, CEO, Cellnex: I’m sorry. I can’t I’m I’m really sorry, James. We don’t enter in the in the in the details of the contract because it’s covered by NDA, but there is a little point. When calculate the total contract value, the duration of the contract has several closes of automatic renewal. So you should imagine that this contract and they have an agreement with Telefonica of fifteen years.

So a good part of our contract, there is a part of the contract with a shorter duration and a part of the contract with a longer duration to be compliant with the terms that DG has with Telefonica. So it’s you should review slightly on on the You should review slightly the duration of the contract. I hope I gave you any hint.

Akhil Dattani, Analyst, JPMorgan: Yes. Thank you very much indeed, Jan. Have a have a great summer break. Thank you.

Marco Patoano, CEO, Cellnex: Okay. Thank you, James.

Maria Kehapaten, Head of Investor Relations, Cellnex: Okay. So we’ve come to the end of the questions. As as always, the the team is here to to follow-up on any specifics that you’d like to cover. If not, have a wonderful holiday, and look forward to speaking after the summer.

Marco Patoano, CEO, Cellnex: Thanks, everyone. Thank you. Thank you. Have a good holidays.

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