INWIT, financial statements at 31 december 2022 approved
GROWTH OF ALL INDICATORS, IN LINE WITH THE GUIDANCE.
NEW 2023-2026 BUSINESS PLAN:
MORE INVESTMENTS IN INFRASTRUCTURE FOR MOBILE CONNECTIVITY AND
GROWTH OF REVENUES TO MORE THAN 1.2 BILLION IN 2026.
DIVIDENDS POLICY EXTENDED, BUY-BACK PLAN,
BROAD-BASED SHARE OWNERSHIP PLAN FOR ALL EMPLOYEES
Rome, 2 March 2023 – The Board of Directors of Infrastrutture Wireless Italiane S.p.A. (INWIT), met today, chaired by Oscar Cicchetti, and examined and approved the Financial Statements as of 31 December 2022.
Main results as at 31 December 2022
During the 2022 financial year, all the main industrial, economic and financial indicators increased compared to 2021:
|Unit of measurement
|Number of sites (period end)
|Total hostings (period end)
|of which with OLOs (period end)
|Tenancy ratio (period end)
|SC/DAS remote units (period end)
|Real estate transactions
|Earnings for the period
|Recurring Free Cash Flow
|Net Financial Position (NFP)
|Financial leverage (NFP/EBITDA)
From an industrial point of view, 2022 saw a continuation of the development of INWIT’s technological infrastructure:
- extending our park of sites to include 480 new sites;
- continuing to increase new hostings, amounting to over 4,000 for the year as a whole;
- extending the multi-operator microcell coverage plan in the locations with the highest concentration of users and traffic, developing more than 500 remote units;
- boosting its efficiency also through its plans to renegotiate rental contracts and purchase land, with more than 2 thousand real estate transactions.
At 31 December 2022, the average number of operators per site (tenancy ratio) rose to 2.16 from the 2.01 recorded at end 2021, thereby being confirmed as amongst the highest in the sector.
Main economic-financial results
Revenues stood at 853.0 million euros, up +8.6% on the same period of 2021 (785.1 million euros), considering the growth of the hostings with all the main customers, particularly OLOs, of other services and the development of the DAS indoor coverage. Growth of +9.0% net of one-off revenues (0.6 million euros in 2022 and 3.3 million euros in 2021).
EBITDA stood at 779.2 million euros, up by +9.0% on FY 2021, with a margin on revenues stable at 91.3%, while EBTIDAaL, the company’s main profit level indicator, was 587.0 million euros, up +12.9%, thanks to the continuous actions to increase the efficiency of rental costs and the purchase of lands. The EBITDAaL margin was up from 66.2% to 68.8% (+2.6 percentage points) as a percentage of revenues.
The net profit for the period stood at 293.3 million euros, up by +53.3% on the same period of 2021 (+55.0% excluding the aforementioned one-off revenues/costs).
Recurring free cash flow for FY 2022 was 491.4 million euros, up +34.1% on the same period of 2021, as an effect of the growth of the EBITDAaL, lesser financial charges and the benefit of the tax efficiency plans activated in 2021.
Industrial investments for the period amounted to 187.0 million euros, focusing on the Company’s technological and infrastructure development, which included investments in new sites, the development of new DAS indoor micro cell coverage, land purchases and technological improvements of sites.
Net financial debt amounted to 4.1 billion euros, including IFRS16 financial liabilities, being essentially stable on 31 December 2021. The performance reflects the company’s solid cash generation in terms of recurring free cash flow, investments in growth and dividend payments. Financial leverage, namely the ratio of net debt and EBITDA, is down to 5.2x from 5.7x at end 2021, due to the growth of operative margins (EBITDA).
The Board of Directors passed resolution to propose to the Shareholders’ Meeting to pay a dividend, for 2022, including the use of part of the available reserves, amounting to 0.3467 euros for each outstanding share at the coupon date, up to a maximum of 332.9 million euros. The dividend will be paid on 24 May 2023 (coupon date 22 May 2023 and record date 23 May 2023).
The proposed dividend is in line with the dividend policy approved by the Board of Directors in November 2020.
4Q 2022 main results
The results for the fourth quarter of 2022 confirm the continued acceleration in the growth of the main industrial KPIs, revenues and an improvement in profitability and cash generation.
|Unit of measurement
|Earnings for the period
|Recurring Free Cash Flow
|Net Financial Position
Q4 2022 saw a continuation of the development of INWIT’s technological infrastructure:
- extending our park of sites to include 205 new sites;
- continuing the increase in new hostings, amounting to 1,245;
- pursuing the plan for multi-operator microcell coverage in the locations with the highest concentration of users and traffic;
- boosting its efficiency also through its plans to renegotiate rental contracts and purchase land, with 510 thousand real estate transactions.
Revenues totalled 220.5 million euros, an annual growth of +8.1%. EBITDA was 204.1 million euros, an increase of +10.2% on the same period of 2021. This growth, together with greater efficiency in leasing costs, has led to expansion of EBITDAaL, which totalled 157.6 million euros, an increase of +15.4%, and as a percentage of revenue reached +71.5% in Q4 2022, up from +67.0% in Q4 2021.
Net profit totalled 76.3 million euros, up +82.8% compared to the same period of 2021, while Recurring Free Cash Flow amounted to 140.9 million euros (+65.7%). At 31 December 2022, net financial debt came to 4.1 billion euros, of which approximately 1.0 billion euros referred to IFRS16.
Outlook for the 2023 financial year
INWIT is Italy’s most important wireless infrastructure operator, on the strength of the most extensive network of macro sites (towers, masts, pylons – macro grids) and systems of micro-cell coverage (Distributed Antenna Systems, DAS and small cells – micro grids), assets that assure a capillary, integrated coverage of the territory in support of connectivity, with a “tower as a service” business model in support of all mobile, FWA and IoT operators.
The reference, technological and market scenario for the Tower Companies sector is characterised by positive structural trends, such as the growing use of data on the move, the current technological transition towards 5G, the need to complete and increase the density of coverage, contributing also to reducing the digital divide and the considerable investments made in digital technologies and infrastructures, also supported by the Next Generation EU programme. In the short-term, in addition to the major demand for connectivity, difficulties and strong competition continue to remain on the Italian telecommunications operator market, impacting the profitability of the sector as a whole. The INWIT business model, which is based on long-term inflation linked hosting contracts, offers protection and support in this context.
These trends result in a growing market demand for new infrastructures and hosting services, as well as the activation of innovative services that are allowing TowerCo to transition from real estate assets to actual shared digital infrastructures, spread throughout the territory, connected to the grid, secure and available to all operators. INWIT, therefore, finds itself in an ideal position to play a leading role in the current digital transformation in progress.
After the 2020 merger with Vodafone Towers and completion of the integration activities in 2021, in 2022 INWIT’s industrial and financial results have recorded a greater, more solid growth trend, which is expected to continue this year, through a further improvement of all industrial, economic and financial indicators.
As regards the outlook for the 2023 financial year, we expect to see growth in revenues in the range of 960-980 million euros, an EBITDA margin of approximately 91%, stable on 2022, the EBITDAaL margin of approximately 71%, up by two percentage points on 2022 and Recurring Free Cash Flow up to in the range of 595-605 million euros.
In terms of shareholder remuneration, the company’s current dividend policy envisages dividends per share up +7.5% per year through to 2023.
These expectations reflect the continuous development of the number of sites, which will be strengthened in 2023, the increased hosting by all the major mobile, FWA and OTMO operators on the market, further development of indoor DAS/micro-grid hosting and the benefits linked to inflation.
2023-2026 Business Plan
The Board of Directors has also examined and approved INWIT’s new Business Plan for 2023-2026 (“2023 Business Plan”). Despite confirming the guidelines of the previous Business Plan unveiled in November 2020 and updated in February 2022, the 2023 Business Plan reflects the evolution of the macroeconomic, industrial and market context of recent years, which results in INWIT having an increased capacity to invest in developing its infrastructure and improving the main industrial, economic and financial targets.
INWIT is the most important wireless infrastructure operator in Italy, supported by an infrastructure consisting of an integrated ecosystem of macro-grids, more than 23 thousand towers distributed in a capillary fashion throughout the country, and micro-grids, over 7 thousand DAS (“Distributed Antenna Systems”) and small cells on which the transmission equipment of all the main mobile and FWA operators is hosted, as well as IoT equipment. From a commercial point of view, INWIT looks to the market as digital, shared infrastructure operator, according to a “Tower as a Service” model and benefits from long-term contracts with the anchor tenants, TIM and Vodafone Italia, as well as an extensive customer based thanks to its role as neutral host. These contracts are inflation linked, which offers protection in the current macroeconomic context.
The INWIT business model enables the country’s digital transition, supporting telecommunication operators and the evolution of the network towards 5G architecture, which calls for a greater number of sites and hostings in order to cope with the densification and optimisation needs of indoor coverage, through the DAS micro-cell coverage systems. Another structural driver underlying the greater demand for digital infrastructure services is the constant increase in mobile data consumption: in western Europe, average data consumption per smartphone has gone from 15 GB per month in 2021 to 19 GB in 2022 and is expected to grow by 18% a year through to 2028, when it should reach 52 GB per month. Greater data consumption and need for coverage and densification are just some of the trends underlying the tower market growth in Italy, with a number of macro sites expected to grow from approximately 48 thousand in 2022 to approximately 56 thousand in 2026, the need for indoor coverage for more than 3 thousand buildings, as well as coverage for thousands of kilometres made up of roads, motorways and rail connections.
Significant infrastructure development investment plan
To best intercept the growth opportunities offered up by the market, the 2023 Business Plan envisages an ambitious investment plan of approximately 900 million euros in 2023-2026, for a total of 1.3 billion euros in the period 2021-2026, up by approximately 200 million euros on the investment plan disclosed in November 2020. Investments will be mainly used to develop new sites (macro grids), to strongly develop indoor micro coverage with DASs (Distributed Antenna Systems) and to increase the purchase of plots of land, reflecting positively on the profitability expected over the duration of the plan. In addition to these areas of greater investment, the increase also reflects the current inflation scenario, which, it is recalled, has a positive net impact on the company’s profits, thanks to the index-linking of the hosting contracts to inflation.
INWIT’s market positioning, as shared infrastructure operator according to a Tower as a Service model, on the strength of two anchor tenants and which is able to serve all market operators, boosted by a significant investment plan, makes it possible to pursue some of the industry’s most ambitious organic growth targets, according to four main guidelines:
- the partnership with the anchor tenants for an efficient development of 5G;
- the capacity to proactively serve the OLOs, MNO customers, FWAs and others;
- the “scale” development of the network of DAS indoor micro coverage;
- the investments in innovative businesses with a short-term focus on the IoT.
The 2023 Business Plan envisages revenues growing in the period 2023-2026 at a “high-single-digit” average annual rate, up to more than 1.2 billion euros in 2026 (compared with 853 million euros in 2022), with an expansion of the EBITDA margin to 92% (91% in 2022) and the after-lease EBITDAaL margin to 76% (69% in 2022). It is expected that this growth in margins translates into an expansion of cash generation (Recurring Free Cash Flow) up to more than 730 million euros in 2026.
The 2023 business plan objectives consist of a rise on what was previously disclosed to the market, a reflection of the company’s improved investment capacity, which will result in a continuous development of the infrastructure in terms of new sites and indoor coverage. The increase in investments will have a positive impact on revenues and profitability, which will also benefit from the positive structural market trends and the positive net effect of inflation.
|Unit of measurement
|Annual growth (CAGR)
|High single digit
|Recurring Free Cash Flow
EBITDA growth during the plan is expected to translate into a progressive reduction of the financial leverage (net debt with respect to EBITDA), starting from the value of 5.2x at end 2022 through to approximately 3.5x in 2026.
In line with the company’s cash generation profile and the current rating profile, this reduction in leverage will progressively create usable financial flexibility to finance greater investments and greater remuneration of shareholders. This financial flexibility will be allocated to maximising the company’s value creation profile, investing in INWIT’s core business, on adjacent businesses within the value chain of digital infrastructures and additional forms of greater remuneration of shareholders.
Therefore, on the basis of the economic-financial development envisaged in such plan, the Board of Directors has approved the update of the dividends policy for the period 2023-2026. In particular, the current dividend policy, which envisages a dividend of 0.30 euros per share paid in 2021, was extended, growing +7.5% per year through to 2023, with an additional payment of 100 million euros starting from the allocation of 2023 profits (payment in 2024), confirming a dividend growth rate that totals 7.5% per year. This is expected to make for a 2023 dividend of approximately 0.48 euros per share, up by more than 25% on the dividend envisaged by the current dividend policy.
For the first time, the Board has resolved to offer shareholders an indirect way by which to realise their investment in the Company – in addition to the direct realisation possible in accordance with the Dividends Policy – through the buy-back and subsequent cancellation of treasury shares, without the simultaneous reduction of the share capital. As the buy-back and subsequent cancellation operations are one-off in nature, they will concern up to 31,200,000 ordinary shares, representing approximately 3.25% of the share capital and, in any case, for a maximum amount of 300 million euros. Both are subject to the favourable vote of the majority of shareholders of the Company, present in the shareholders’ meeting, other than the shareholder or shareholders who, separately or jointly, hold the relative or absolute majority share, as long as more than 10% (“whitewash”) as well as the favourable approach of Consob on the applicability to the cancellation of the exemption from whitewash envisaged by Art. 44-bis, subsection 2 of Consob Regulation no. 11971 of 1999.
The Board of Directors has approved, through to 2026, the update of the Sustainability Plan, in line with the new Business Plan, of which the Sustainability Plan is an integral part, to make the most of the development opportunities towards the pursuit of sustainable success. The update was driven by an even greater integration of sustainability into business strategy, represented by the concept of “Tower as a service”, structured into the three areas of ESG commitment.
More specifically, the company’s commitment is strengthened towards the achievement of gender equality, the reduction of the digital divide and the definition of a climate target through to 2030 Net Zero, intended as the comprehensive elimination of the company’s direct and indirect emissions and the removal of all residual ones, so as to obtain net zero emissions for the business.
Approval of the 2022 Integrated Report and 2022 Non-Financial Statement
The Board of Directors has approved INWIT’s third Integrated Report, containing the fifth Non-Financial Statement (NFS) drafted voluntarily pursuant to Article 7 of Legislative Decree 254/2016.
With the Integrated Report, drawn up on the basis of the <IR> Framework criteria, INWIT confirms its willingness to offer its stakeholders a complete and diversified vision of its commitment pursuing the company’s sustainable success, with the Sustainability Plan being the main driver.
After having last year obtained validation by the Science Based Target initiative (SBTi) of the target reduction of its CO2 emissions, in 2022, INWIT took a further step forward in the climate strategy and procured 100% electricity from renewable sources.
Energy efficiency investments continued during 2022, with the installation of free cooling systems and high efficiency current rectifiers, which allow annual savings at full capacity of more than 9 GWh. As regards renewable sources, more than 100 photovoltaic plants have been installed.
As regards the management of the waste produced at its sites, considering the nature of the materials disposed of in 2022 (air conditioning systems, batteries and electrical material like energy stations, straighteners, electric panels), a significant amount of material was recovered, 98.5% of the total 931.4 tonnes.
2022 was also the year that saw INWIT take up a position on the topic of biodiversity, through the preparation of a paper seeking to analyse the impacts and opportunities of its business.
In a “tower as a service” logic, collaboration was then started with WWF Italia.
This sees the installation on some of INWIT’s infrastructure of advanced technology able to detect fires at an early stage in three protected wooded areas managed by the WWF.
The attention paid to the territory also takes concrete form with the promotion of projects aimed at enabling coverage of smaller municipalities and rural areas so as to reduce the digital divide. In this sense, INWIT’s work also continues to execute the NRRP Italy 5G Plan, awarded to the Temporary Grouping of Companies formed by INWIT, TIM and Vodafone Italia and aiming to foster the development of cutting-edge technology, also in 1,200 disadvantaged market failure areas.
As confirmation of the central role played by people in its sustainability strategy, INWIT has organised its first INWIT Day to strengthen the corporate identity and has awarded its employees a bonus worth 1,000 euros to be spent on shopping and purchasing vouchers valid throughout 2023. In 2022, the total workforce continued to grow and approximately half the new employees are women.
The commitment to activate projects covering structures of major social and cultural significance (such as museums, universities and hospitals), in 2022, made it possible to reach more than 40 hospitals with indoor coverage projects using DAS (Distributed Antenna System) micro antennas.
2022 also saw coverage of the National Etruscan Museum, the world’s most important museum on the Etruscan civilisation.
As confirmation of the validity of INWIT’s route towards implementing a sustainable business model, in 2022, for the first time, INWIT entered the Bloomberg Gender Equality Index and the FTSE4Good. It also increased its ESG rating in the GRESB index, from D to B in just two years, and reported on its climate change impacts through CDP Climate Change, obtaining a B score.
TCFD Report 2022
The company has prepared its first TCFD Report, which implements the reporting framework defined by the Task Force on Climate-related Financial Disclosure (TCFD) so as to gather clear and comparable information not only on the impact of the company’s activities on the climate, but also, conversely, on the effects of climate change on the company.
Based on the 11 Recommendations of the TCFD, in this report INWIT analyses and summarises the key elements regarding the functions and processes through which the company monitors and manages climate-related risks and opportunities, the climate objectives that the company has set itself in this area, with the relevant metrics for monitoring them, as well as the strategy defined to achieve such.
Corporate Governance Issues
The Board of Directors has ascertained that each Director continues to meet the integrity requirements laid down by current legislation and that the Directors Ms Bariatti, Ms Cavatorta, Ms Roseau Landrevot, Ms Ravera and Mr Valsecchi continue to meet the independence requirements established by the Consolidated Law on Finance (CLF), by the Corporate Governance Code and by the qualitative and quantitative criteria used to assess independence, as defined and approved by the Company’s Board of Directors; it also ascertained that the Director Mr Le Cloarec continued to meet the independence requirements laid down by the Consolidated Law on Finance.
The Board of Statutory Auditors has informed the Board of Directors that it has completed the operational self-assessment process and that, at the meeting held on 13 February 2023, it carried out the checks on the continued fulfilment of the integrity, professionalism and independence requirements of each Statutory Auditor; the Board of Directors has in turn acknowledged this assessment in today’s session.
The Board of Directors has approved the 2022 Report on Corporate Governance and Share Ownership, which reports the outcome of the verification of continued fulfilment of the independence requirements relating to the Directors and Statutory Auditors, as well as the results of the related self-assessment of the Board of Directors, and the Board of Statutory Auditors.
The Board of Directors has also approved, on the proposal of the Nominations and Remuneration Committee, the Report on the 2023 Remuneration Policy and fees paid in 2022 and also resolved to submit to the Shareholders’ Meeting a long-term share-based incentive plan (LTI) for 2023-2027.
The Board has also approved a new Broad-Based Share Ownership Plan for 2023 and 2024 for all employees, with the aim of promoting the participation in achieving the company’s objectives and strengthening their sense of belonging, in line with the company sustainability objectives in the medium- and long-term.
Call of the Shareholders’ Meeting
The Board of Directors today called the Ordinary and Extraordinary Shareholders’ Meetings, in a single call, for 3.00 p.m. on 18 April 2023 at the Palazzo delle Stelline, Corso Magenta 61, Milan.
The Board passed resolution to submit to the Shareholders’, in addition to the approval of the financial statements for the year ended 31 December 2022 and the proposal for the payment of a dividend:
• on the proposal of the Nominations and Remuneration Committee, (i) the Report on the 2023 Remuneration Policy and fees paid in 2022 and (ii) a 2023-2027 LTI long-term share-based incentive plan, and (iii) a new Broad-Based Share Ownership Plan for 2023 and 2024 intended for all employees, with the aim of promoting engagement in achieving the company’s objectives and strengthening their sense of belonging, in line with the company’s sustainability objectives in the medium- and long-term.
• authorisation for the purchase and disposal of treasury shares pursuant to and for the purposes of Articles 2357 and 2357-ter of the Italian Civil Code, Article 132 of Italian Legislative Decree no. 58 of 24 February 1998 and Art. 144-bis of CONSOB Regulation no. 11971 of 1999 to serve remuneration plans based on financial instruments pursuant to Article 114-bis in favour of directors, employees or collaborators of the Company, as well as the free assignment of shares, including the 2023-2027 Plan and the 2023 and 2024 ESOP. This request for authorisation to buy-back concerns up to 1,150,000 shares, representing approximately 0.12% of the share capital.
• authorisation for the purchase of treasury shares pursuant to and for the purposes of Articles 2357 and 2357-ter of the Italian Civil Code, Article 132 of Italian Legislative Decree no. 58 of 24 February 1998 and Art. 144-bis of CONSOB Regulation no. 11971 of 1999 as well as the related proposal to cancel any treasury shares as may have been purchased to this sole end. As the buy-back and subsequent cancellation operations are one-off in nature, they will concern up to 31,200,000 ordinary shares, representing approximately 3.25% of the share capital and, in any case, for a maximum amount of 300 million euros. Both are subject to the favourable vote of the majority of shareholders of the Company, present in the shareholders’ meeting, other than the shareholder or shareholders who, separately or jointly, hold the relative or absolute majority share, as long as more than 10% (“whitewash”) as well as the favourable approach of Consob on the applicability to the cancellation of the exemption from whitewash envisaged by Art. 44-bis, subsection 2 of Consob Regulation no. 11971 of 1999. This is in order to, for the first time, offer shareholders an indirect way by which to realise their investment in the Company – in addition to the direct realisation possible in accordance with the Dividends Policy – through the cancellation of the shares bought back, without the simultaneous reduction of the share capital.
In all, the buy-backs can be carried out within the limits set forth in Article 2357, subsections 1 and 3, of the Italian Civil Code, taking into account the ordinary shares held from time to time in the Company’s portfolio.
The authorisations to purchase treasury shares are requested for the maximum duration required by law of eighteen months from the date of the Shareholder authorisation resolution. The Board of Directors has resolved to propose to the Shareholders’ Meeting that the purchases be made at a price to be identified each time, considering the chosen method by which to implement the transaction; without prejudice to the fact that purchases will be made for a price no more than 10% lower and no more than 10% higher than the reference price recorded by the INWIT share in the stock market session on the day prior to each individual transaction. With reference to the disposal of treasury shares other than cancellation as above, the Board of Directors has resolved to propose that the Shareholders’ Meeting do so in any way considered as appropriate and in the Company’s interests, for the pursuit of the aims as per the resolution proposal. As of today, INWIT holds 293,873 treasury shares in the portfolio, equal to 0.03% of the share capital. For all additional information concerning the proposed authorisation to purchase and dispose of treasury shares, please refer to the explanatory reports of the directors, which will be published within the terms and according to the methods set forth by provisions of law and regulations in force.
• the proposal to supplement the independent auditors’ fees.
The call notice of the Shareholders’ Meeting of 18 April 2023 and all related documents shall be made available to the public – within the terms of the law – on the Company website (https://www.inwit.it/en/governance/shareholders-meeting/) and on the authorised storage platform “1INFO” (www.1Info.it).
Information on Russia/Ukraine conflict
With reference to the events relating to the war in Ukraine, the factors that may impact the business performance have been identified and assessed under the scope of the Enterprise Risk Management process. The company constantly monitors the crisis as it unfolds, intensifying its monitoring and risk mitigation measures as may be necessary, also with a view to identifying any impacts that cannot be foreseen to date. In any case, there are no significant effects on the financial statements as at 31 December 2022 or on the outlook for the company’s business.
Significant events after the end of FY 2022
No significant events occurred after the end of the financial year.
The economic and financial results of INWIT at 31 December 2022 will be illustrated to the financial community during a conference call scheduled for 3 March 2023 at 10.30 a.m. (CET). Journalists may listen to the conference call, without asking questions, by calling: +39 02 8020927. The presentation to support the conference call will be made available in advance in the Investors section of the company website www.inwit.it.
Pursuant to subsection 2, Article 154-bis of the Consolidated Law on Finance, the Manager responsible for preparing the corporate accounting documents, Rafael Giorgio Perrino, has declared that the accounting disclosures contained in this press release correspond to the documentary evidence and the accounting books and records.
 Source: Ericsson Mobility Report, November 2022
 Source: Altman Solon Report for INWIT