Earnings call transcript: Cellnex Telecom Q3 2025 sees growth, stock dips

Cellnex Telecom reported its Q3 2025 earnings, highlighting a 5.7% organic revenue growth and a 6.9% increase in adjusted EBITDA. Despite these positive financial metrics, the company’s stock price fell by 4.4%, trading near its 52-week low. The market reaction might be attributed to concerns over future earnings projections and the company’s leverage ratio.

Key Takeaways

• Organic revenue grew by 5.7%, with adjusted EBITDA up 6.9%.
• Stock price decreased by 4.4%, nearing its 52-week low.
• Strategic focus on network densification and 5G/6G deployment.
• Improved leverage ratio from 6.6x to 6.4x.
• Committed to significant shareholder returns by 2026.

Company Performance

Cellnex Telecom demonstrated solid performance in Q3 2025, with organic revenue growth of 5.7% and a 6.9% increase in adjusted EBITDA. The company continued to strengthen its market position by adding 3,000 new build-to-suit PoPs and over 2,000 net new colocations. These efforts are part of a broader strategy to enhance network capacity and prepare for future 5G and 6G deployments.

Financial Highlights

• Organic Revenue Growth: 5.7%
• Adjusted EBITDA Increase: 6.9%
• EBITDA Growth: 7.5%
• Recurring Levered Free Cash Flow: EUR 1.3 million
• Free Cash Flow: EUR 187 million
• Leverage Ratio: Improved to 6.4x from 6.6x

Outlook & Guidance

Cellnex reaffirmed its financial targets for 2025 and 2027, with a commitment to return EUR 1 billion to shareholders by 2026. This includes EUR 500 million in dividends, growing at 7.5% annually, and EUR 500 million in share buybacks. The company aims to maintain a leverage ratio between 5x and 6x, while continuing to invest in network densification and colocation.

Executive Commentary

CEO Marco Patuano emphasized Cellnex’s essential role in digital infrastructure, stating, "We are an essential facility. Digital is our life." He also highlighted the company’s strategic importance, noting, "Our consent is required across the board, reinforcing our central role in shaping outcomes."

Risks and Challenges

• High leverage ratio, which could impact financial flexibility.
• Future EPS forecasts indicate potential challenges in profitability.
• Increasing network congestion and regulatory pressures.
• Potential market saturation in key regions.
• Macroeconomic factors affecting telecom infrastructure investments.

Q&A

During the Q&A session, analysts focused on Cellnex’s ability to handle M&A consolidation and its investment strategies in network quality. The management expressed confidence in their flexible approach to capital allocation and commitment to projects with strong returns.

Full transcript - Cellnex Telecom (CLNX) Q3 2025:

Maria Carrapato, Head of Investor Relations, Cellnex: Okay, good morning, everyone. My name is Maria Carrapato. I’m Head of Investor Relations, and I’d like to thank you again for joining us for our third quarter 2025 conference call. I’m joined by our CEO, Marco Patuano, and our CFO, Raimon Trias, who will go through the key highlights of our results, and then we’ll open the line to take your questions. In the interests of time and clarity, I’d ask that you focus on more strategic questions for the management team and avoid repeating topics that have already been explained in previous questions. On more detailed numerical issues, I encourage you to place them to the IR team to make this call as relevant as possible for all participants. If you wish to ask a question, please press the button on your screen to raise your hand, and we will be limiting questions to two per participant.

As usual, any follow-up questions can be addressed after the call to the IR team. Without further ado, over to you, Marco.

Marco Patuano, CEO, Cellnex: Thank you. It’s a pleasure to be with you again this quarter to share how we continue to execute our strategy with discipline, consistency, and a sharp focus on long-term value creation. While we acknowledge recent concerns around potential impacts from M&A consolidation that have affected our share price, I’d like to begin by focusing on what truly matters: the fundamentals. Because ultimately, it’s the strength of our business and our ability to deliver sustainable performance that defines Cellnex’s value for both shareholders and stakeholders. We report another period of strong operating and financial results, enabling us to reaffirm all our public targets and demonstrate the resilience of our business model. The first nine months of the year, we delivered solid growth across all major financial metrics on an organic performer basis. Revenues increased by 5.7%, adjusted EBITDA rose 6.9%, EBITDA grew 7.5%.

These results reinforce our confidence in the business and allow us to strengthen our commitment to shareholder returns. We began returning capital ahead of schedule, with EUR 800 million delivered in 2025 via share buybacks. Today, we’re committing to a total of EUR 1 billion in shareholder returns through the end of 2026, representing a 5.4% yield at current share prices. Now, looking at the highlights of our results for the period, the operational demand remains robust, with continued momentum in BTS and colocation. PoPs grew by 4.1%, underscoring our critical role in enabling digital connectivity across all our portfolio, including markets that have recently undergone consolidation. Our operational efficiency and land acquisition programs are delivering tangible results, driving a 150 basis points improvement in EBITDA after lease margin, which expanded to 60.8%, up from 59.3% a year ago.

We remain confident in our ability to unlock further efficiency and enhance operating leverage. Recurring levered free cash flow grew 9.5% year to date, reinforcing a consistent quarterly trend. Over the past 10 quarters, recurring levered free cash flow has delivered a CAGR of 2.1%, and on a per-share basis, a key metric for us, recurring levered free cash flow has achieved a CAGR of 2.5%, reinforcing our commitment to sustained shareholder value creation. Free cash flow has turned positive and is accelerating along a clear upward trajectory supported by lower capital intensity, positioning us firmly to meet our 2025 and 2027 targets, which we fully reiterate today. As communicated to the market, we recently signed a put option agreement to sell our French data center business for EUR 391 million, reinforcing our focus on core telecom infrastructure and unlocking value through disciplined asset rotation.

A note on our shareholder reduction program underway: following the EUR 800 million buyback executed earlier this year, this will drive clear improvement in per-share metrics and continue enhancing shareholder value. On the balance sheet, leverage is down from 6.6 times to 6.4 times, and we remain committed to our 5-6 times target range. We are investment-grade and fully committed to maintain that status. I would also like to share positive news on our credit rating. Just days ago, Fitch reaffirmed our triple B minus rating and raised our leverage threshold from 7.0 to 7.3 times. This adjustment gives us greater financial headroom. We view it as a further independent validation of our strong business outlook and financial discipline. In summary, we are delivering continued operational growth, increasing operating leverage through efficiency, reducing capital intensity, and accelerating free cash flow generation, positioning ourselves to capture long-term value.

The outlook is positive, and as a result, we are accelerating shareholder returns whilst reinforcing strategic focus. Let’s now take a closer look at the details behind our results. In slide five, we illustrate the strength of our operational leverage and how it translates into profitability and cash flow growth. Over the first nine months, we’ve delivered consistent progress across all key metrics, underscoring the resilience of our model. Organic revenue growth was solid, and combined with efficiency initiatives, we successfully converted that momentum into profitability. Both EBITDA and EBITDA after lease advanced on strong rates, reflecting not only scale but also disciplined cost and lease management. Beyond profitability, we further reinforced cash generation, and when we look at the recurrent leverage free cash flow per share, the improvement is even more pronounced, highlighting our commitment to creating sustainable shareholder value.

In short, these results confirm that our growth is efficient, margins are expanding, and our ability to generate recurring cash is stronger than ever. Moving to slide six, we’re happy to announce EUR 1 billion shareholder remuneration for 2026, which will be split in EUR 500 million in dividends, as previously announced at our capsule market day, which will grow at an annual rate of 7.5% through 2030. Payments will be made in two equal installments of EUR 250 million in January and July. EUR 500 million will be returned via share buybacks. This includes EUR 300 million already earmarked for shareholder remuneration, plus an additional EUR 200 million enabled by the sale of our French data center. The buyback program will be executed in the regulated market and will run through the end of 2026. Remaining proceeds will be used to reduce leverage, reinforcing our disciplined approach to capital allocation.

These reinforced commitment to shareholder returns reflect our deep conviction in the fundamental value of our company and our focus on delivering long-term value. Yes, we should expect more on that front. Financial outlook is reiterated. Given the strength of our results and continued execution, we are reaffirming our guidance for 2025 and 2027, underscoring our confidence in delivering our business outlook and on our commitment to the market. I will now hand over to Raimon to share some more key data on our operational and financial performance on the quarter. Raimon, to you, please.

Raimon Trias, CFO, Cellnex: Thank you, Marco. Good morning, everyone. Let’s move to slide nine and dive into the results. We have in front of us another quarter of a strong performance. As highlighted earlier by Marco, revenues grew organically by 5.7%, demonstrating solid momentum and the resilience of our business model. Adjusted EBITDA increased by 6.9%, while EBITDA after lease rose by 7.5%, reflecting a strong operational leverage. Looking at cash generation, recurring levered free cash flow reached EUR 1.3 million, keeping us firmly on track to meet our full year targets. Free cash flow came in at EUR 187 million, reinforcing our trajectory of accelerated cash generation supported by lower CapEx intensity, mainly lower build-to-suit. Turning to operational metrics, execution remains strong. We added almost 3,000 new build-to-suit PoPs, expanding our footprint to meet rising demand.

In parallel, we delivered above 2,000 net new colocations, underscoring our strategy of network densification and quality enhancement for our customers. Our customer rating improved to 160, up from 158 at the year-end 2024, marking continued progress in tenancy. We continue to execute effectively on our lease management programs. As committed in the capital markets today, we are increasing the focus on land initiatives. As a result, this year, land and efficiency CapEx totaled EUR 195 million compared to EUR 135 million last year, more than a 40% increase. All our metrics show solid performance quarter after quarter. As you can see in slide 10, we continue to deliver strong year-on-year organic growth. Such growth is driven by several key factors: CPI and escalators on the paid revenues, colocation on existing sites, and the rollout of new build-to-suit programs, particularly in France and Poland.

To provide a clearer view of our performance during the period, we have excluded the impact from Ireland and Austria. On this slide, we present our organic revenue reach on a pro forma basis. Excluding both countries, organic pro forma growth at the consolidated level was 5.7%, while our revenues grew by 5.1%, underscoring the strength of our operations. Let’s look at the data on the remaining business lines on the next slide. Starting with fiber connectivity and housing services, we delivered a strong growth of over 20% year-on-year, driven mainly by the continued rollout of the NextLoop fiber project in France. Thus, the small cells and RAN services growth was 0.8%. When adjusting for the discontinuation of operational maintenance contracts in Spain, the underlying trend was positive at 6.2%. Please remember that we decided to discontinue O&M activities due to its low profitability.

Project deployment in DAS and small cells tends to be quite lumpy, depending on the pipeline execution phasing, but also impacted by trading activity that is less regular. Finally, broadcasting delivered a stable growth of 1.5%, supported by ongoing renegotiations of contracts. Overall, these results confirm the robustness of our diversified portfolio, with each business line contributing to consistent growth. Moving to slide 12, this slide reflects the continued positive evolution of our PoPs growth across all geographies, driven by a combination of colocation and build-to-suit programs. What stands out is the consistency of this trend, even in markets that have undergone consolidation processes. Take Spain and the U.K., for example. Both have experienced consolidation among M&As, which could have created headwinds. Yet, we successfully mitigated these impacts and maintained robust growth, proving the resilience of our model, the strength of our customer relationships, and our contracts.

Looking at the consolidated view in the top right, the upward trajectory is clear. We have a large and growing base of PoPs across Europe, reinforcing our position as the market leader. This scale not only supports current demand, but also gives us a strong platform to capture future opportunities. In the bottom right, we show the quarter PoPs growth by country and providing the split between colocation and build-to-suit program. It is worth noting that in the third quarter, we had an important contribution of ran-sharing PoPs from Digi in Spain. Moving to the next slide, we provide the details on how our operational efficiency and industrial focus are driving tangible results. It all starts with the key levers: process optimization and standardization, integrated maintenance and vendor management, centralized knowledge and performance excellence, and targeted land acquisition and efficiency actions.

These initiatives enable automation and scalability, creating standardized and data-driven operations across all countries. We have achieved sustained reductions in maintenance costs to improve operations and efficiencies. Full digital adoption has allowed us to standardize workflows and enable real-time supervision, while centralized models have reduced complexity and improved resource utilization. The impact of these actions can be clearly seen on the right side of the slide on a per-hour basis. Staff costs are down 1.7%. Repair and maintenance costs have decreased by 3.7%. SG&A is down 5.5%. In leases, we have offset the impact of CPI as a result of the successful outcomes of our lease management and CapEx programs. Altogether, these efficiencies have contributed 180 basis points to a EBITDA after lease margin, reinforcing the scalability and cost-effectiveness of our operating model.

In short, this is a strong example of how industrial discipline translates into measurable financial benefits and positions us for sustainable growth. Moving to slide 14, the first part of the slide explains the reported bridge from EBITDA after lease to free cash flow, showing all the components that shape our recurring levered free cash flow and free cash flow. This strong recurring levered free cash flow generation is the result of our solid operational performance and efficient tax and capital structure. Finally, our free cash flow was positive at EUR 187 million, supported by the strength of recurring levered free cash flow and lower capital intensity both on expansion and build-to-suit CapEx. On the bottom chart, we break down the evolution of performer CapEx. First, overall expansion CapEx decreased by 1.7%, reflecting disciplined investment without compromising growth.

Second, looking at the mix of expansion CapEx, we see a balanced allocation. Towers remain the largest share, while efficiency CapEx initiatives have increased, reinforcing our focus on optimizing returns. Finally, build-to-suit CapEx decreased by 4.2%, reflecting progress to complete the outstanding programs supporting the free cash flow acceleration path. This disciplined deployment is driving efficiency and improving free cash flow conversion, which is a cornerstone of our strategy. On slide 15, we see that cash flow generation is accelerating, supported, as we mentioned, by lower capital intensity. This improvement reflects disciplined investment and a clear focus on efficiency. It also adjusts for the impact of remedies. Equally important, our share buyback program is enhancing per-share metrics, as Marco mentioned. Let me remind you that during the year 2025, we have executed EUR 800 million of share buybacks.

The recurring levered free cash flow per share has grown significantly, 13.2%, showing that we are not only generating cash, but also returning value to shareholders in a meaningful way. Together, these elements confirm that our capital allocation strategy is working. We are investing wisely, generating more cash, and creating sustainable value per share. Before I give the floor back to Marco, let’s now take a look at our debt maturity profile on slide 16. All 2025 maturities have been either repaid or refinanced. As a result, there are no remaining maturities left in the year, while we still remain with a strong cash position. It is worth noting that 78% of our debt is fixed rate. Our average cost of debt is 2.1%, with an average maturity of 4.4 years.

Our leverage ratio has improved from 6.6 to 6.4, and net financial debt decreased despite the execution of the share buyback by circa EUR 500 million, reflecting disciplined capital management. Now, I’ll give the floor to Marco to continue with the presentation. Thank you.

Marco Patuano, CEO, Cellnex: Thank you, Raimon. At this moment, it is mandatory to tackle the topic of the M&A consolidation, so let’s do it. Let’s move to slide 18. First, I remain confident in our future. Demand for data is increasing, networks are congested, and we provide a mission-critical service to operators. The need for densification, driven by the rollout of 5G, becoming a demand from artificial intelligence, and the early pilot tests of 6G are just some indications of what is ahead of us. We also benefit from positive optionalities stemming from regulatory requirements, as we saw in the case of the U.K. merger between Vodafone and Three, with mandatory investment requirements, and the continuous rising in data consumption. This is only going one way, and this way is up. The elephant in the room is M&A consolidation. This might be new to some of you.

It’s not definitely new to us. We successfully preempted contract renegotiation with Telefónica in 2023, extended to 2052. We recently announced two contract extensions with MasOrange, 2048, Vodafone Three, 2055. More duration is more predictability, is more visibility. Those are tangible results. They didn’t happen by luck. It’s a result of strategic planning by Cellnex. Overall, I’m not overconcerned about M&A consolidation. Let me share with you a few reasons why our business is resilient in the face of consolidation and why we see it as a strategic opportunity. The key reason why M&A merge is for market repair, not for site decommissioning. This push for consolidation among European mobile network operators is driven by long-standing market challenges: declining revenues, low margins, limited room for further efficiency gains, high investment needs, low return on capital.

Consolidation can help M&A to repair their markets, eliminate inefficiency, unlock potential for improvement and expansion in their margins. Remedies have generated new entrants and remedy takers. Non-opposition by regulator comes this way with behavioral remedies demanding continued improvement in network coverage, capacity, and quality. These drive growth in the market and for the tower costs in the medium term. At the same time, spectrum renewals are increasingly being tied to CapEx obligations, signaling again a meaningful shift in regulatory priority towards investment-driven outcomes. We are confident that all those opportunities will offset the potential challenges related with potential churn or growth reduction in the immediate aftermath. Our all-or-nothing contracts offer long-term visibility and stability, but equally important is the strategic alignment that defines our trusted relationship with clients.

M&A will not walk away from this agreement, not only due to the complexity and the cost of replacing a partner deeply embedded in their network evolution, but also because of the value we co-create and the absence of a viable alternative to replicate such a significant portion of their infrastructure. M&A recognized the need to invest in network quality and coverage. On page 19, we present you a selection of some of the many public statements made by the M&As. Let’s now move to slide 20 to tackle the M&A consolidation in some of our key markets. In past consolidation cases, we have successfully negotiated win-win outcomes. We have consistently demonstrated the strength and enforceability of our contracts across all consolidation scenarios.

Each case has affirmed our legal standing and led to successful negotiations that not only reinforced but extended our contractual terms, underscoring the respect M&A have for their validity and their strategic importance. We have strong legal protection. Our long-dated all-or-nothing clauses and our consent is needed due to change of control clauses. We have a direct seat at the negotiation table. This is what has allowed us to extend contracts in recent years. We have captured incremental business, both from consolidating operators and from broader market-driven growth. Post-consolidation, our M&A clients are stronger and better clients and willing to improve their networks to better compete on network quality and services. Investments are needed, and Cellnex owns the key infrastructure for that. These outcomes have preserved the net present value of our assets while contributing to a healthier, more investment-ready M&A ecosystem.

While early-year cash flow may be slightly lower due to flexibility we provide to M&As in order to streamline inefficiencies, they rebound over time and ultimately surpass previous levels. That is before accounting for additional investment in mobile networks. We have positive optionality there. Spain and U.K. are proven success stories. We have already demonstrated our ability to thrive through consolidation. Preserved NPV of our contracts, extended MSA maturities Spain to 2048, U.K. to 2055, strengthened client partnership, and expanded business scope. For example, we recently announced new deployments with Vodafone Three in U.K., part of their EUR 11 billion investment plan, to be one of Europe’s most advanced standalone 5G networks, aiming to reach 99.95% of the population by 2034. Other M&As will likely respond with further investment in order to remain competitive. In Spain, market momentum continued to build.

Digi has constructed an additional 3,000 PoPs through ran-sharing on Telefónica and network, and Telefónica itself has expanded its footprint with us by adding 110 new physical PoPs. I want to move to France. Slide 21. In France, we have around 12,000 PoPs from SFR, with over 80% under all-or-nothing contracts and annual churn rates below 1%. The earliest MSA renewal is in 2039, and secondary tenants’ contracts begin to expire only in 2034. With a geographic reference, in rural areas, 60% of our PoPs are in rural crozone areas, with full ran-sharing between SFR and WIG, so already very efficient. From the terms announced in the M&A’s first offer, as expected, WIG will retain rural sites where SFR is an anchor tenant, ensuring continuity. These sites were part of our original portfolio and generate no incremental ran-sharing fees, so financial impact is simply non-existent.

In dense areas, less than 10% of the PoPs are non-anchor, meaning almost all are protected by long-term contracts. Our technical analysis shows that these sites are critical not only for SFR but for WIG, Iliad, and Orange, supporting ongoing densification efforts even amid consolidation uncertainty. From both a legal and a technical standpoint, we see minimal risk of churn under any consolidation scenario. Any changes to our contracts require our consent, positioning us as a key stakeholder in the negotiation. We expect to participate meaningfully in the value created, capturing synergies from the emergence of stronger, more resilient M&As and benefiting from the substantial CapEx commitments that regulators will require as a condition for their merger approvals. It is also important to know this will be a long process. M&A must first agree on terms, then navigate due diligence.

They have to pass through regulatory reviews, stakeholder approvals throughout, maintaining service quality, which will be paramount. We are essential to that continuity. Recent rumors in Italy. Another market. Our approach remains the same, remains consistent. We are confident we can preserve the NPV of our contract with credible upside potential for the reasons mentioned above: data consumption, network capacity, congestion, etc. There are a few points that are very relevant on the potential non-M&A consolidation in Italy as a market. Italy has stringent emission restrictions, making our existing sites extremely valuable. A colocation on our main competitor is limited, given its high starting colocation ratio. Our sites are needed. The risk on our operation in Italy is low. Possibly, you saw this morning the last announcement on an additional colocation agreement and extension with Vodafone Fastweb for a further 12 years.

Our thesis is demonstrated once again. Now, time to wrap up. Let me leave with a few takeaways. We continue delivering strong operating and financial performance across the board, and we remain firmly on track to achieve all our targets. Our focus on industrial excellence continues to pay off, driving increasing operating leverage and accelerating both in everyday after-lease and free cash flow metrics. We’ve also seen clear validation of our strategic partnership with customers and of the strength of our MSA contracts, which continue to demonstrate resilience amid evolving market dynamics. Importantly, Cellnex remains a non-avoidable counterparty in any consolidation scenario. Our consent is required across the board, reinforcing our central role in shaping outcomes. We view consolidation as an opportunity, a chance to deepen strategic alignment with our clients and to benefit from the growing need for densification and quality improvement.

Finally, we have reiterated all our public targets. We remain fully on track for our dividend commitment starting in January 2026. Thank you. Let’s move on to Q&A, Maria. The floor is yours. Okay, thank you, Marco. We will move over to the first question. It comes from Andrew Lee at Goldman Sachs. Hello, Andrew. Operator, can you see if the line is open? Yes. The line is open. Okay, let’s go to the next question. The first question comes from Roshan Ranjit at Deutsche Bank. Great. Afternoon, everyone. I’ve got two questions, please. On the buyback, can I just get a kind of understanding of how you think about the mix when you came up with the kind of the EUR 1 billion? Obviously, last year, you put this ordinary dividend for about EUR 500 million.

You’ve kind of used the proceeds from the data center sale to top up the buyback. Was there a consideration to maybe start the ordinary dividend from a higher base? Coupled with that, can I just check that you are still guided to the kind of EUR 10 billion cumulative cash distribution by 2030? Secondly, on the credit rating change, I think that the Fitch decision came, I think, earlier than what you had perhaps thought. What are the implications of that higher headroom? Clearly, you’re a whole turn below the upper ceiling there. How should we think about the benefits of that? Is it more of a cost of funding when we come up for the refis? Anything you could say around that would be very helpful. Thank you. Thank you very much, Roshan.

On the buyback, first of all, we committed to EUR 500 million dividends, and we stayed to the EUR 500 million dividend. We’ll walk our talks. In this moment, one year ago, we said that the minimum would have been EUR 800 million. And I think that we all agree that with the share price at this level, just for being consistent, we made a share buyback at EUR 32. With the share price at EUR 27, we do or EUR 26, we do a share buyback. It’s consistency. The idea is we want to have the dividend strongly linked to the free cash flow that we are generating. Further cash that is made available is going to be allocated, depending on the market moment, to share buyback, extraordinary dividends. I think that we all agree that at this level, it’s the best decision as this. On credit rating, having flexibility is always good.

First of all, what is important is that Fitch, after S&P, has confirmed the validity of our investment thesis. If you take the report issued by Fitch, you see how they evaluate the risks, even the risks of M&A consolidation. They are considered moderate risks. This is very important. For us, it is important to have flexibility. In this moment, in this very moment, the board decided that the flexibility is capped for the rest of the year. Having the flexibility means that in any moment, we can use the flexibility. Okay, thank you. We will move on to the following questions. It comes from Rohit Modi at Citi. Hi, thank you for taking my questions. Just one follow-up on the leverage question with that. Keeping your leverage target 5-6, given you have a higher threshold.

Firstly, on the timing, I think your earlier target was 2025, 2026, but with this shareholder return, clearly, you will be above six times in 2026. Please correct me if I’m wrong. So are you moving it a bit further when you say 5-6 leverage target range? And then the flexibility around, I’m just trying to understand, will there be flexibility in terms of using the flexibility on investing into organic growth, like operational efficiencies? You have been generating quite a decent return on those investments. So what kind of opportunities you see there? And second question is just on any other disposals that you have in pipeline or that you think, like the data centers, that could come up in the future. Thank you so much. Sorry, I tried to answer two. Rohit, the first question, I think, was clear. The second question was not clear. Sorry. Apologies.

Only on the disposals. Any other disposals that could be in pipeline apart from the French data centers that you think that you consider could be on strategic and want to dispose? The leverage question was in terms of the timing of the target. The path to the leverage has been very consistent. Now, the moment we decided to accelerate our shareholder remuneration this year and the increase of the shareholder remuneration for 2026 is clearly going hand in hand, not with the change of our target. Our target remains 5-6, but we consider that even having in mind this flexibility that we were mentioning before, we aim to be between 2026 and 2027 for going to 6.0 or below 6. Our target remains the same. We have a prudent view on our capital structure. We want to be between 5 and 6.

As I said before, having some flexibility gives us not flexibility in the final goal, but flexibility in the time to go, which in any case will remain fairly consistent in our view. On disposals, our key principle is that we sell an asset when the value can be maximized. In this moment, we do not need to sell assets to maintain our commitments or to deliver what we promised to the market. Having the value maximized is what we did in Ireland, is what we did in Austria, in Nordics, and even recently in the French data center. If you take why we took a little bit longer to sell the French data center, it is simply because we decided to maximize the result of the disposals. Discussions in one of our specific markets are still ongoing, but we are not under pressure. We have no more commitments.

If there will be something, if there is something more, we will let you know. We stay absolutely disciplined, and we only sell when value can be maximized. Okay, moving to the next question from Ottavio Adorisio at Bernstein. Hi, good morning. Thanks for taking the questions. Moving on, the first question is actually on the business as it is at the moment. Looking at the results, I’ve seen reducing contributions from colocation, and that is a big contrast with improving momentum in the PoPs. The question is, is it just the fact that the PoPs came towards the end of the quarter, so therefore we should expect better contribution next quarter, or just the mix because it was ran-sharing? Therefore, the economics are not as good, and therefore that’s the reason why colocation’s contribution to revenues is not being great.

This tied up to the questions on M&A. This is not the first time we talk extensively about all the protections you have on the contracts towards consolidations, and the fact that you do work in partnership with the M&O is just not that effectively protected by the contracts just because the M&O will need you. My question is, as the M&O talks to one another, and therefore the negotiation has been long in the making, is the fact that probably they’ve been halting or pausing their colocation plans, and that is impacting your current performance of revenues? Thank you. Thank you, Ottavio. Your first question, the answer is both the topics that you mentioned. The growth in the PoPs, as we said, is coming in a certain quantity from ran-sharing in Spain. As you know, let’s make a rule of thumb.

If an MSA counts one, the price of a second tenant is half of it, and the price of a ran-sharing is a fourth or a fifth of what is an MSA anchor fee. The answer is yes, there is both. There is a portion that is due to timing and a portion that is due to price mix. On M&A, first of all, thank you because you clarified spot on that the protection is coming on one side from the legal, but on the other side from the intimacy we have with our clients. I was just talking a few days ago with our clients in France, and they were telling me the process, if we are able to make it, will last four to five years.

A couple of years between agreeing on the price and getting the approval, and then another couple of years for making the asset allocation among the bidders. Do you think that we can wait five years before making another colocation or another? The answer is no. Life goes on because the clients are there and the competition is there and the quality required is there and the traffic growth is there. The answer is, I think that we tend to overestimate that the world stops because there are talks about people talking about consolidation, and the entire planet stops. Those processes take a year, and therefore, the fact that we work with them is super important. Of course, we work together.

We are saying to SFR, let’s slow down in urban areas, but let’s continue in the rural areas because in the rural areas, everybody knows that the day of tomorrow, it will go to Bouygues, who is ran sharing with them. It is a day-by-day work. We work with them every day. We work with them constantly. It is very much on the intimacy. Okay, thank you, Ottavio. Now moving on to Halima from Goldman Sachs. Yes, thank you for taking my questions. I have two, please. Firstly, on the decision to stick to the minimum EUR 500 million dividend, just wondered if you could take us through the thinking around this and how you look at allocating capital between the dividend and a buyback. Secondly, could you share any updates on your refinancing plans past 2025? Thank you.

Yes, okay, I take the dividend and I leave the refinancing to Raimon. Sorry, I say again what I said before. We committed to EUR 500 million growing by 7.5% starting from 2026. We decided that 2026 could be from January 1 to December 31. We said, okay, let’s start in January because our cash flow is very much okay, is slightly better than our original expectations. The dividends are there. We have, as a minimum, other EUR 300 million as a minimum. How do we think about it? With the share price at 26-27, it’s very easy to think about because the attractiveness of a share buyback in terms of long-term value creation for the shareholder is there. There is nothing to invent.

I hope that it will not take so long to create me the doubt of if it is still convenient or if we have to think into extraordinary dividends. As of today, the decision is very easy. Raimon, on refinancing. We are looking at refinancing. I would say various things. First, we have closed the quarter with EUR 1.4 billion of cash available with no maturities in the year 2025 and EUR 1.7 billion of maturities in the year 2026. On top of the cash, we have the environmental facilities, EUR 3.3 billion. In total, our liquidity is EUR 4.8 billion that covers the maturities of 2026 and 2027. We have a good situation from a liquidity perspective. We have the first maturity coming April 2026, if I am not wrong, and our idea is to go to the markets probably beginning of next year.

We’re looking and we’re actively looking for opportunities to see if it makes sense to go out this year or next year, and we will decide depending on market situation. So far, what we are trying to look at is to gain as much duration as possible so that our debt correlates more also to the income that we have from our contracts. We’re looking at maturities from 7-10 years that makes, from a cost perspective but duration perspective, more sense than the situation we have today so that we are able to increase the average maturity of 4.4 a bit longer. Okay, thanks. Now moving on to James Raxa from New Street Research. Yes, good morning, Marco. Thank you for taking the question. I had two, please. The first one on organic growth.

What I’m interested about is, when I look at your BTS programs, you have a few that have just finished. You’ve got a few that are coming up to expire, so kind of Iliad in Italy and France. You’ve maybe got Sunrise in Switzerland, a couple in Portugal. What are you seeing from those M&Os in terms of their demand for tenancy growth as the formal BTS programs complete? Do you see kind of ongoing demand beyond the completion of those BTS programs? Secondly, just interested in the performance you’d had in Italy this quarter. It looks like in particular, kind of tower revenue growth you booked there was extremely strong. I was wondering if you can comment on that anymore, and is that a kind of sustainable level of growth going forward? Thank you. Yes, I take the first, and I leave to Raimon the second.

The build-to-suit programs that we are completing now are the result. It’s a sort of a forward execution of the original M&A. When we bought the portfolio, there were existing towers and new towers. Going forward, is it going to be there is going to be more growth? The answer is yes. This growth is going to be all via colocation. No, it’s not going to be all via colocation, but I think that the quantity of new towers that is going to be built in the future is going to be materially lower than what we built in the past. Operators realize that if they want to be efficient, one way to be efficient is stop building towers and pay every time an anchor fee. Paying a second fee is a good way for being more efficient in their network deployment.

It is also true that some further towers are going to be needed. I’m not violating any secret. Iliad is launching an RFI for building more towers in France from 2026 to 2035. This is basically what we say. The world goes on. What I don’t think is that future build-to-suit programs can be as expensive as it has been in the past. The past model was an M&A, a copy-paste of an M&A contract. Going forward, this is going to be much more industrially driven. What is the reasonable cost of building a tower? What is the reasonable cost of maintaining a tower? And what is the reasonable cost for renting a tower? This is more what we see going on. Hope I answered. Raymond on Italy. Yep.

On Italy, as you will probably have seen today, we have signed and renewed an agreement with Fastweb Vodafone where we have today a bit more than 2,000 PoPs, and we have negotiated for an extra 1,000 PoPs to continue with their 5G development, and it’s a renewal for the next 12 years. This will enhance the coverage of 4G and 5G. It will cover more or less a bit over 1,000 sites. What you have in the financial this quarter, and it will be again next quarter, is a one-off part of this agreement in order to reserve those spaces that they have asked for. That’s clear. Thank you very much. Thank you, James. Okay, moving on to Andre Cavecchi at UBS. Hi everyone. Thank you very much for the presentation and the opportunity. I guess two questions.

One is a follow-up on the debate that we just ended. Marco, you mentioned the RFI that Iliad is launching. I believe last year you actually turned down, if I’m not mistaken, a similar small build-to-suit project for them. Sorry to interrupt you, Andre, but the line isn’t very good. Maybe you can try and speak closer to the phone. Is this better? And maybe a little bit slower. Hello? Hi, can you hear us? If you could speak a little bit slower and just closer to the phone. Is this better? Yeah, better, much better. Okay, thank you. Apologies. I wanted to follow up on the build-to-suit. You mentioned that Iliad is launching this RFI for a new build-to-suit program in France. I was wondering, because I believe last year you guys declined a small project from Iliad in Italy.

I think one of the reasons was that basically the free cash flow profile was of paramount importance to you, so you did not want to get into a new BTS program. I was wondering with the rapid decline or with the visibility on the rapid decline of BTS CapEx over the next couple of years, and at the same time, obviously, I guess your desire for going after opportunities that would spur further growth over the midterm, how are you thinking about your interest in new BTS programs for Cellnex over the midterm? That’s number one. Number two, relating to the, I guess, higher-level situation in France, obviously, you are flagging, and I think very logically, the fact that you are so embedded with three out of the four parties that would potentially be merging in Italy and France.

I was wondering from your perspective, at which point in this negotiation process are you expecting to be able to go out to the market and communicate some kind of framework at least for an outcome relating to the network structures or the anchor contracts, rather, that you have with the M&Os? Because I believe in Spain, for example, from the moment that we had the MásMóvil Orange announcement, we had seen almost two and a half years elapse between that announcement and your announcement of a renegotiation with the contract there. I believe France is likely to be very different, but at what point or have you had conversations with these companies already, and at what point or how early in the process are you confident that you can actually give assurance to the markets that you are, again, in an MPV-positive situation or neutral? Thank you. Yeah.

First, on your first question, I correct you mildly. When we refused to enter in a new BTS program, it was not because of CapEx restriction, but it was because it was not a good business. We are very disciplined in looking to the returns on our capital allocation. Time ago, you were calculating the return starting from a zero or free risk rate. Now free risk rate is not zero. Cost of capital is not zero. Cost of capital is higher. We needed to have a good return on capital. If the return on capital is not good, it’s not good. That’s it, period. The fact that going forward we will have a better cash flow does not mean that we are going to relax our requirements in terms of return on the investments. The return on the investment has to be accretive.

If the investments are not accretive, they are not good investments. They are not good capital allocation, and they prefer to allocate capital as they did now, for example, in buying shares. It is not that since I have more cash flow, I have to use the cash flow badly or poorly. On France, sorry, of course, if there is good capital to be put at work, more than happy to do it. France, we meet with our clients almost once a month. And my guys in France, I meet with them, I can’t say every day, but let’s say even more frequently. The truth is that everybody knows that we have to be brought to the table early stage. Early stage means that you need to have at least a framework to talk about.

In this moment, what we discuss with our client is how can we make preliminary homework. So our engineering department is making analysis, by the way, together with the M&Os to understand what is the traffic per cell, per city. So we are making a lot of homework in order to be ready the day of tomorrow that we have to allocate not the non-urban, but the urban towers. Who is the natural buyer? Because there is not a single natural buyer. The natural buyer means that Tower A contributes more value to Orange and Tower B more to Wig and Tower C to Iliad, and we’re going to allocate this way. So it’s a work we are doing. We’re not wasting our time, but it’s still too preliminary for having a real allocation, a real matrix of allocation.

What we all know is rural is not going to be a problem, zero comma zero problem. Urban, we all know that the problem is super modest. So we are there. We’re working there, Andrei. Okay, thank you, Andrei. Moving on to the next question from Graham Hunt at Jefferies. Thanks very much. I’ve just got two questions. I think just coming back to a question earlier, just on confirmation of the total capital flexibility of EUR 10 billion out to 2030, but on that, sort of following on from that, if, as you say, the ratings agencies are comfortable with your outlook and even the risk around M&A consolidation, if they’re offering you more leverage headroom, is there actually potential for upside to that EUR 10 billion number?

Given where the shares are today, what is it that is stopping you from sort of leaning into the buyback a little bit more? Maybe not in 2026, but could you see that stepping up a bit more aggressively over the following years? Thank you. Thank you, Graham. The EUR 10 billion, we are already including a component which was a component of re-leveraging. The re-leveraging we are considering is staying within the 5-6. Okay? Let’s say that we are in the ballpark of EUR 10 billion, and depending on how close you want to stay, 5.5 or to 6, you can move a little bit up or a little bit down, but this is the ballpark. Is it important to have this flexibility? Yes, it is extremely important. As I said before, we do not change our long-term view. We want to be with a prudent capital structure.

Now, nobody sees clouds at the horizons, but if clouds come all of a sudden, capital structure cannot be changed one day to another. It is much better to be prudent with good weather than discover that you have not been prudent with bad weather. Is it possible to be more aggressive going forward? Yes, it is always possible. I think that these are long discussions that we are making with the board. Every time the board, we have, as you know, a capital allocation committee inside the board. It is, I think, one of the best committees. I have been in boards since a long part of my life. It is one of the best I have seen operating in my life.

Every time we have a good session, and this is one of the topics, how bold we should be in terms and how prudent we should be and what is the correct mix. Having the flexibility is having the flexibility. Five to six stays five to six, but having the flexibility is always good. I leave to the board to make the final decision. Now moving on to the next question from Fabio Pavan at Mediobanca. Yes, hi. Good morning. Thank you for critiquing my question. Actually, I think there is a big debate. I managed to travel a lot these days and to meet industry leaders in the telecom space on the need to speed up 5G coverance as low latency is crucial to sustain the take-up in generative AI.

I think it’s also something you were mentioning that regulators are flagging strong needs for investing more in digital infrastructure. To me, it looks like we are concerned about M&A consolidation, which, as you pointed out, is something that may take time to be implemented. While in the midterm, maybe earlier than this, we should have an increase in demand for new services from your side. What I’m missing on this, and the second question, which is probably related to this, is market clearly is concerned and doesn’t see any upside, which I do see on this low-latency take-up. Do you think that this may lead as a consequence to some consolidation also in the tower space, not just in the telecom space at European level? Thank you. Thank you, Fabio. Always good in your analysis. 5G coverage in Europe is way beyond the rest of the world.

Asia, they are already talking about 6G. In the U.S., the battle is really a battle of network quality instead of being a battle of who cuts the price most. You saw that AT&T and Verizon are fiercely battling for who has the medal of the best network. In Europe, we are still counting on the networks of the old good times. The network of the old good times are suffering. Every time an operator installs a new network, a new 5G network, it unlocks an enormous quantity of traffic. This is something that is mandatory. It cannot resist more. People want to have better networks. The U.K. has been a clear example. The quality of the networks in the U.K. is so dramatically poor that it cannot stay like this.

You live in Italy, and every time you take a high-speed train, you have a high-speed train and low-speed telecommunication network. It is there. We have to catch it. We are ready to work together with our clients. I think that this is very important. Business is there. I have zero doubts. We are an essential facility. Digital is our life. Our life is digitalized. We are the infrastructure for the digital mobile digital life. We are an essential facility. It cannot go back. The tower consolidation, tower consolidation, there are two kinds of tower consolidation. One is in-market tower consolidation, and the other is cross-market tower consolidation. In-market tower consolidation, every time it is possible, is good. Because ultimately, there are too many portfolios, and some of them are overlapped.

Part of the tower consolidation can turn into decommissioning of tower, which turns into synergies, into efficiency. It would be good. Now, is it possible? As of today, we do not see many markets in which this is possible, but there are markets in which the situation is turning bizarre. Spain has two and a half networks and four tower operators. It is bizarre. You live in Italy, and Italy is much more linear. There are two and a half or eventually three networks with two and a half or three tower operators. It is much more linear. This is what I think is possible in the near future. Okay, moving on to Akil Datani, J.P. Morgan. Hi, good afternoon. I have got two questions as well, please. Firstly, if I could just maybe ask a question on your organic growth.

If we look at the last couple of quarters, on a headline basis, it looks like organic growth rates have been slowing. Last year, you reported just over 7% organic growth. The last three quarters, each quarter, it slowed. I think this quarter, if you back it out from your year to date, it comes in at 5% for Q3. I guess if we strip out the point that Raimon made about the Italian contract, maybe it is even close to 4%. I am just trying to understand what is going on. I know maybe there might be some distortions in there from works and studies. Maybe the slowdown is not what it looks like. Maybe you could just help us understand what is going on with top-line performance and how we should understand it. That is the first question.

Then the second question is on consolidation. Marco, you have obviously given us a lot of color around why you are so confident and the protections you have in your contracts. I guess I would love to understand what do you think could go wrong? Because I guess if we look at the market today, that is what the market is fearing. The comparison I often get from investors is the U.S., where U.S. telecom is also very confident going into consolidation, but growth rates have slowed a lot. What do you think? If you think about the puts and takes, what are the areas where there might be risk? Obviously, I understand the strength in your contracts, but where could there be potential areas of slippage in growth from consolidation? Thanks a lot. Okay. Yes, on organic growth, we should split the organic growth.

As you know, the organic growth has a component coming from pop growth. There is a component coming from some engineering service, like every company in the tower space. We adapt sites in order to co-locate antenna and pops and objects, dishes, etc. This is something that has seasonality because there are moments of the year in which you can do more and moments of the year in which you can do less. If I take the co-location, we have had more than an issue. More than a destination, it is more in the mix of the price than in the number of the pops that are co-located. I mean, the mix is how many build-to-suit, which are anchor clients, very high price. How many are secondary tenant, which are mid-price, and how many are ran-sharing, which come with a lower price.

The mix, the price mix, is something that people tend to a bit underestimate. In this moment, with the change of mix, so having less build-to-suit growth and more colocation, less ran-sharing growth, you do not have only a different impact on CapEx, but you have also a different price mix. Therefore, the impact on revenues is different from the past. In the past, a lot of the growth was coming from build-to-suit, so from anchor clients, so contract to the very high price. On consolidation, as we discussed several times, consolidation, you have to imagine consolidation as a two-moment event. The first part of the consolidation is a reorganization of the network.

People talk about efficiency, but you have always to think, "I cannot serve two customer bases with a single network." The first moment is, "How can I serve two customer bases with two networks that have to be designed more efficiently?" This is the first part of the exercise. The second part of the exercise is, "What is the quality I want to deliver to my clients?" The topic of the quality is changing very, very, very quickly. If you talk with any expert in AI-driven application, they will tell you that it’s not that it will drive more data consumption, but it’s a different kind of data consumption. Network has to be dense. Network has to be more capacity for uploading, etc. You need to design the network differently.

Yesterday, we were talking with a very good CTO of one of our clients, and he was telling us, "There is a topic of coverage because ubiquitous service is considered mandatory today. If you do not have the good network in your subway, you are not happy. Capacity is a big problem, and accessibility is a big problem." Everything goes in the direction that going forward, more has to come. I am positive. What was breaking us, breaking until today? The fact that the M&O had not enough resources to invest. That is the truth. The truth is that they could not invest enough because they did not have enough money to invest. The day they will have more money to invest, they will invest more. Moving on to the last two questions. We have AviLash now from BNP. Hi, good afternoon. Thanks for taking my questions.

I’ve got two, please. Firstly, just a clarification on the shareholder returns, given what you said about the sort of mix between dividends and buybacks. If you think about 2027, should we think that the dividends is sort of EUR 500 million growing by 7.5%, and then any further gap, you sort of make up with buybacks so that you do at least EUR 800 million a year from 2027 onwards as well? Secondly, just a quick clarification, please, on the numbers in France, if I may. Did the EBITDA there continue to benefit from the sort of net benefit from pass-through revenues for the last few quarters? Maybe if you could just give some color there and whether you think that this is sustainable in the coming period as well, that would be helpful. Thank you. Okay, so AviLash.

Marco will take the question on the shareholder returns, and then maybe on the detailed question on numbers. We will take it in the call later in the IR team, okay? Okay, on shareholder return, yes, we are committed to EUR 800 million, not only for 2026, but 2027 onwards. As you said, the EUR 500 million would grow 7.5%. The EUR 500 million becomes, so help me with the math, is EUR 540 million or something like this. The remaining part is going to be allocated depending where the share price is going to be in 2027. Please help me to surprise me, to make me the doubt that making share buybacks is not convenient. It is a topic for the moment, same as for the total amount, as we always said. We fix, we committed to a minimum. Every time we can allocate more, we will allocate more.

Okay, so last question coming from Fernando Abril at Alantra. Yes, thank you very much for taking my questions. First, a follow-up on the shareholder remuneration. I do not know if you can be a bit more precise on the leverage target on the five to six times EBITDA. I do not know if you want to be today in the upper end of the range or the low end, because, I mean, one time EBITDA is EUR 3 billion-EUR 4 billion of potential remuneration for the next four or five years. I do not know if you can be a bit more precise where do you want leverage to be in the next years. And then second question on expansion CapEx, I have seen is down around 10% year on year. Also, as a percentage of sales, it is down more than 100 basis points.

I don’t know if you have any, I don’t know if this was temporary or a structural decline for the next few years. And do you have any internal target for expansion CapEx to be a percentage of sales in the next few years? Thank you. Cool. On the financial leverage, being prudent depends also on the moment, on the climate, on what is around us. What we said is we want to be in the 5-6, and then where, if it is going to be more 5.5 or 5.7, etc., it will depend on a gazillion things. I became CFO in 2008, and the world exploded all of a sudden. People who were CFO with zero interest rates had another story.

I think, Fernando, if I can add, on the capital markets day, what we said is that our target was the middle point, the 5.5, and we would move up and down from five to six depending on how interest rates are moving. That has not changed. We remain exactly the same. Interest rates are maybe a bit lower also with investment grade that we were not at that moment or we became just at that moment. More or less, that has not changed. Also, just to highlight one topic on that, remember, and we mentioned that in the capital markets day, we deliver every year around 0.4 times.

That is important because when you were saying, "No, when we stand today, we stand at 6.4, but with a capacity of the leveraging of 0.4 per annum." The way we consider expansion CapEx is not a percentage of the revenues. The way we consider is we go project by project. We look if the project has a good return. This year, we decreased a bit the expansion CapEx, but it is not. I think that considering a fixed percentage is very convenient for modeling, but it is not the way that we work every day. Countries send us projects. They intercept projects. They prefilter the project in order to avoid us analyzing the projects that are clearly not convenient. They compete for a basket of resources. Best project goes first. This is the way we work. It is not a fixed percentage.

I would be happy to have a very good project with very good returns going forward. Okay, thank you. Thank you very much, everybody, for being on the call and all your interesting questions. As always, the IR team are available, and obviously, management. Please feel free to call. Thank you very much. Thanks, everyone. Thank you.

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