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  3. INWIT: results at 30 june 2024. The growth trend continues for industrial KPIs, revenues and investments
30 July 2024
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 Financial

INWIT: results at 30 june 2024. The growth trend continues for industrial KPIs, revenues and investments

Q2: 240 NEW TOWERS, 60 MILLION IN INVESTMENTS, REVENUES +8.2%, EBITDAaL +11.1%

  • CONSOLIDATED REVENUES: IN Q2 2024 THEY CAME TO 257.1 MILLION EUROS, SHOWING GROWTH OF +8.2% COMPARED WITH THE SAME PERIOD OF 2023. IN H1 2024 THEY TOTALLED 511.7 MILLION EUROS, SHOWING GROWTH OF +8.6% COMPARED WITH H1 2023 THANKS TO THE GROWTH OF HOSTINGS, THE DEVELOPMENT OF REVENUES FROM NEW SERVICES AND THE POSITIVE CONTRIBUTION MADE BY THE ADJUSTMENT OF CHARGES FOR INFLATION.
  • EBITDA: IN Q2 2024 IT TOTALLED 235.6 MILLION EUROS, UP BY +8.9% COMPARED WITH THE SAME PERIOD OF THE PREVIOUS YEAR. MARGIN ON REVENUES UP SLIGHTLY TO 91.6%. DURING H1 2024, EBITDA CAME TO 468.6 MILLION EUROS, UP +8.9% COMPARED WITH H1 2023, WHILE THE MARGIN ON REVENUES CAME TO 91.6% COMPARED WITH 91.3% IN H1 2023.
  • EBITDAaL (EBITDA – LEASING COSTS): IN Q2 2024, THE COMPANY’S MAIN OPERATING MARGIN TOTALLED 186.1 MILLION EUROS, UP BY +11.1% COMPARED TO THE SAME PERIOD OF FY 2023. IN H1 2024 IT TOTALLED 1 MILLION EUROS, UP +11.1% COMPARED WITH H1 2023, ALSO THANKS TO THE ACTION TAKEN TO MAKE RENTAL COSTS MORE EFFICIENT.
  • NET PROFIT: IN Q2 2024 IT TOTALLED3 MILLION EUROS, UP BY +10.5% COMPARED WITH THE SAME PERIOD OF 2023. IN H1 2024 IT TOTALLED 179.1 MILLION EUROS, UP BY +9.4% COMPARED WITH THE SAME PERIOD OF 2023.
  • RECURRING FREE CASH FLOW: DURING Q2, THIS CAME TO 159.0 MILLION EUROS, DOWN -14.9% COMPARED WITH THE SAME PERIOD OF 2023, BUT UP +6% COMPARED WITH THE PREVIOUS QUARTER AND IN LINE WITH EXPECTATIONS. IN H1 2024 IT TOTALLED 309.0 MILLION EUROS, DOWN BY -4.5% COMPARED WITH THE SAME PERIOD OF 2023.
  • INVESTMENTS IN INFRASTRUCTURE TO SUPPORT OPERATORS TOTALLED 60.5 MILLION EUROS, UP BY +1.2% COMPARED WITH THE SAME QUARTER OF THE PREVIOUS YEAR. DURING H1 2024, INDUSTRIAL INVESTMENTS CAME TO 152.1 MILLION EUROS, UP +30% COMPARED WITH THE SAME PERIOD OF 2023, CONCENTRATED ON NEW TOWERS, LAND ACQUISITION AND THE EXTENSION OF DEDICATED INDOOR COVERAGE.
  • INFRASTRUCTURE DEVELOPMENT CONTINUED IN THE SECOND QUARTER WITH MORE THAN 240 NEW TOWERS AND MORE THAN 900 ADDITIONAL HOSTINGS FOR MOBILE OPERATORS, FWAs AND OTHER CUSTOMERS. AROUND 50 NEW DEDICATED DAS COVERAGES FOR PRIMARY INDOOR LOCATIONS COMPLETED.
  • FINANCIAL LEVERAGE IN THE QUARTER IMPROVED TO 9X IN TERMS OF THE RATIO OF NET DEBT TO EBITDA, AFTER PAYMENT OF DIVIDENDS AND THE PROGRESS MADE ON THE BUYBACK PLAN, COMPARED WITH 30 JUNE 2023 (5.0X).
  • DEVELOPMENT CONSISTENT WITH THE TARGETS OF THE BUSINESS AND SUSTAINABILITY PLANS.
  • GENERAL MANAGER DIEGO GALLI: “Q2 2024 CONFIRMS A TREND OF GROWTH OF ALL MAIN ECONOMIC AND FINANCIAL INDICATORS. OUR BUSINESS MODEL, BASED ON INVESTMENTS IN SHARED, DIGITAL INFRASTRUCTURES, CONTINUES TO FOSTER THE EFFICIENT DEVELOPMENT OF THE 5G MOBILE NETWORKS IN SUPPORT OF TELCO OPERATORS. INWIT’S FOCUS CONTINUES ON THE ROLL-OUT OF TOWERS, BOTH IN URBAN AREAS AND AREAS OF DIGITAL DIVIDE, AS WELL AS ON THE GROWING NEED FOR DEDICATED INDOOR COVERAGE WITH DAS TECHNOLOGY”.

 

Rome, 30 July 2024 – The Board of Directors of Infrastrutture Wireless Italiane S.p.A. (INWIT), met today, chaired by Oscar Cicchetti, and examined and approved the financial report as of 30 June 2024.

Q2 2024 main results

The results for the second quarter of 2024 confirm the gradual growth in the main industrial KPIs and economic and financial indicators.

 

Consolidated revenue growth in Q2 2024 came to +8.2% compared with the previous year, thanks to the increase in hostings for all the main customers, the deployment of indoor coverage and new services and the positive impact of inflation. The organic growth of INWIT’s revenues therefore continues (+8.3%), which, coupled with the continuous increased efficiency of lease costs, resulted in a growth of the EBITDAaL margin of 1.9pp, for a percentage of revenues that grows from 70.5% to 72.4%.

The industrial results show a large number of hostings and continuous growth of sites created and the tenancy ratio, which is confirmed as one of the highest in the sector.

 

Main economic and financial indicators

During the second quarter of 2024, all the main economic and financial indicators have shown a positive trend:

  • Revenues stood at 257.1 million euros, up +8.2% on the same period of 2023 (6 million euros). Net of one-off revenues, present last year, the comparison with the same period of 2023 is confirmed as up +8.3%;
  • EBITDA stood at 6 million euros, up by +8.9% on Q2 2023. YoY growth is +9.0% if the specified one-off revenues are excluded. The EBITDA margin of 91.6% has increased;
  • EBITDAaL (EBITDA – lease costs), the company’s main operating margin, came to 1 million euros, up +11.1% compared with the previous year, for a percentage of revenues growing from 70.5% to 72.4%; this in consideration of the more than proportional increase in EBITDA with respect to the increased lease costs, which came to 49.5 million euros compared with the 48.8 million euros recorded in Q2 2023;
  • EBIT is 5 million euros, an increase of +13.8% on the same period of 2023;
  • Net profit totalled 89.3 million euros, up +5% compared with the same period of 2023;
  • Business investments for the period came to 60.5 million euros, up +1.2% on the same period of 2023 (8 million euros);
  • Recurring free cash flow in Q2 2024 came to 159 million euros, down -14.9% compared with the same period of 2023, but up +6% compared with the previous quarter, mainly thanks to the growth seen in EBITDA, the favourable changes to net working capital and the lesser outlay for financial charges that more than offset the tax paid during the period;
  • Net financial debt, of 4,658 million euros (including the IFRS16 financial liabilities) has risen (+7.4%) compared with 30 June 2023 (equal to 4,339 million euros), essentially due to the higher remuneration of shareholders in terms of dividends and the buyback of treasury shares. Financial leverage, in terms of the ratio of net debt to EBITDA, has improved slightly to 9x compared with 5.0x in Q2 2023 due to the above-specified increase in net financial debt (financial leverage of 4.5x in Q1 2024).

 

Key Performance Indicators (KPIs)

During the second quarter of 2024, INWIT continued to develop its business by:

  • increasing the number of hostings on its own sites, 920 units;
  • developing its infrastructure and expanding its towers by more than 240 units;
  • continuing the plan for multi-operator microcell coverage in the locations with the highest concentration of users and traffic, developing around 50 new dedicated DAS coverages for primary indoor locations and expanding the remote units by around 600;
  • continuing to improve its efficiency by pursuing the plan to renegotiate rental contracts and purchase land.

As of 30 June 2024, the average number of operators per site (tenancy ratio) is up again at 2.28x, confirmed as amongst the highest in the sector.

 

Main results at 30 June 2024

During the first six months of FY 2024, growth was seen for most of the main economic and financial indicators.

 

Revenues stood at 511.7 million euros, up +8.6 % on the same period of 2023 (471.2 million euros). EBITDA was 468.6 million euros, up by +8.9% compared with the same period of 2023. EBITDAaL was 370.1 million euros, up by +11.1% compared with the same period of 2023. Net profit for the period totalled 179.1 million euros, up +9.4% compared with the same period of 2023.

Recurring Free Cash Flow for H1 2024 was 309 million euros, down by -4.5% compared with the same period of 2023. Business investments for the period came to 152.1 million euros, up 35 million euros compared with the same period of 2023 (+30%) and were mainly allocated to the construction of new towers, the development of indoor micro-cell coverage with DASs and the acquisition of land.

 

Update on the “Italia 5G” Plan of the NRRP

The “Italia 5G” Plan of the NRRP, the programme for the development of new infrastructure in the 1,385 areas of digital divide, is on track with the half-year targets. Thanks to careful and effective operational planning, the trend of submitted and obtained permits continues; the speed and efficiency of the programme is related to the timing of permits and the cooperation of the authorities involved. In this respect, it is essential that the local authorities quickly and fully incorporate the significant simplifications already adopted by the government and parliament.

INWIT continues its commitment to representing the value of shared digital infrastructure in the regions in support of social and industrial transformation, including through close collaboration with institutions and associations representing local communities, starting with the memoranda of understanding signed with ANCI (the National Association of Italian Municipalities) and UNCEM (Italy’s National Union of Mountain Municipalities, Communities and Authorities).

Progress of the Sustainability Plan (2024-2026)

After publication of the first Integrated Financial Statements relating to 2023, INWIT’s commitment continues in the pathway toward implementing a sustainable business model. The Sustainability Plan, which is structured into three ESG (Environment, Social, Governance) areas, is the main tool used to implement the integration of sustainability into the industrial strategy, with the aim of pursuing sustainable success. It also sets out medium/long-term targets and specific lines of action, which transversally involve all the corporate departments, allowing for the development of a culture of sustainability to create value for all stakeholders.

Environment:

  • As confirmation of the solidity of the climate strategy adopted, INWIT has:
  • defined a Net Zero Target for 2040, validated the Science Based Target Initiative (SBTi), thereby strengthening its commitment to a low-carbon economy;
  • obtained ISO 14001 certification for the responsible, integrated management of aspects linked to environmental protection;
  • installed new photovoltaic plants, reaching a total of 500 plants and 2 MW in power.

Social:

  • The commitment continues to reducing the digital divide in support of telecommunications operators:
  • more than 250 new hostings activated in areas with IVSM (Indicator of Social and Material Vulnerability);
  • site development continues for the Italy 5G Densification Plan – NRRP to contribute towards the digitisation with 5G in white areas.
  • ISO 45001 certification obtained in recognition of the attention paid to matters of staff health and safety.

Governance:

 

Progress continues towards the development of a governance system aiming to ensure sustainable success:

  • The Responsible Lobbying Policy has been published to ensure lobbying hinged on principles of transparency, correctness and loyal collaboration with institutions.
  • The Supplier Code of Conduct has been published, to promote an ever more sustainable supply chain.
  • The first Sustainability-Linked Financing Framework (SLFF) has been published, for financial transactions linked to sustainability targets.
  • The first INWIT Sustainability Day has been held, one of the cornerstones of INWIT’s stakeholder engagement activities, on the value of shared, digital infrastructures in our country.
  • Obtained score A-, at Leadership level from CDP Climate Change.
  • Confirmed in the FTSE4Good Index Series, the index managed by FTSE Russell, with an assessment of INWIT’s sustainability performance of 3.6 points, thereby showing improvement on the previous score of 3.5.
  • Upgrade of the Sustainalytics ESG Risk Rating from 19.4 to 18.2, with risk maintained at low.

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Rome 5G: INWIT exercises option for 51% of Boldyn Networks Smart City Roma S.p.A.

Following its announcement on 13 June this year, INWIT, Italy’s leading tower operator, has exercised its option to purchase an exclusive controlling share of 51% of the share capital of Boldyn Networks Smart City Roma S.p.A. (special purpose vehicle 93% owned by Boldyn Italia S.p.A), which won the tender called by Roma Capitale for the Rome 5G project concession at the end of last year.

The closing of the agreement is expected during the third quarter of 2024 and is subject to the green light being given by the relevant authorities and to termination and suspensive conditions in line with market practices, as set out in the agreement formalised on 13 June this year.

The agreement further includes an option right (call) and a right of sale (put) on the remaining 49% of the share capital of Boldyn Networks Smart City Roma S.p.A.. The “call” and “put” options may be exercised after the official test (“collaudo”) of the project, expected by the end of July 2029.

The transaction is part of INWIT’s 2024-2026 business plan and is consistent with the strategy providing for “neutral host” investments to support the network plans of all telecommunications operators, aimed at enabling the growing demand for integrated macro-grid and micro-grid digital infrastructure, outdoor and indoor, especially in significant smart city projects.

The Rome 5G project is being developed to help telecommunication operators provide 5G connectivity, in collaboration with Boldyn Networks, all telecommunications operator and Roma Capitale. The project will be implemented across all the main hubs in the city of Rome, including metro lines, squares and streets. Specifically, it plans to create digital and shared infrastructure to enable 4G and 5G cellular coverage on the A, B, B1, and C metro lines, in 100 squares, on 98 neighbouring streets, and in 7 public buildings of the Municipality of Rome (including the Campidoglio). This will also involve the installation of small cells according to the operators’ needs. The plan also provides for the installation of Wi-Fi in 100 squares, 2,000 cameras and IoT sensors.

Additional resolutions of the Board of Directors

With a view to simplifying the corporate structure and reducing the related administrative and general costs, the Board of Directors has approved the draft merger by incorporation into INWIT S.p.A. of 36 TOWERS S.r.l. and GIR Telecomunicazioni S.r.l., small independent tower companies acquired by INWIT in 2023 and 2024, with the aim of expanding its portfolio of infrastructural assets in Italy. The transaction, which provides for the application of the simplifications provided for by reference legislation for merger transactions of wholly-owned companies, will not entail any issue of new shares nor any assignment of shares of INWIT. Pursuant to the current regulations, the transaction will be submitted to the Shareholders’ Meetings of 36 TOWERS and GIR Telecomunicazioni S.r.l., respectively, and to the Board of Directors of INWIT S.p.A., as allowed by the latter’s bylaws.

The transaction benefited of the exemption from the application of the Procedure on Related Party Transactions adopted by the Board of Directors of INWIT, provided for transactions with subsidiaries, pursuant to Article 14, subsection 2, of Consob Regulation no. 17221/2010 and Article 13.4 of the aforementioned Procedure.

Outlook for the 2024 financial year

INWIT is Italy’s leading wireless infrastructure operator, on the strength of the most extensive network of more than 24 thousand macro sites (towers, masts, pylons – macro grids) and coverage from more than 500 dedicated DAS coverages for primary indoor locations, assets that assure capillary, integrated coverage, fostering territorial 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.

These trends result in a growing market demand for new digital infrastructures and hosting services, underlying the Company’s solid growth trend, which has improved continuously in terms of industrial, economic and financial indicators from when it merged with Vodafone Towers in 2020 through to the present. INWIT’s Business Plan envisages further growth of such indicators through to 2026, supported by a significant investment plan aiming to intercept the increase in demand.

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 and its investment capacity. The INWIT business model, which is based on long-term inflation linked hosting contracts, offers protection and support in this context.

As regards the outlook for financial year 2024, we expect to see:

  • growth of revenues in the range of 1,030-1,060 million euros;
  • EBITDA margin in excess of 91%, stable compared with 2023;
  • EBITDAaL margin of approximately 73%, up more than 1 percentage point compared with 2023;
  • Recurring free cash flow growing in the range of 620-640 million euros:

As regards shareholder remuneration, the policy is confirmed for the period 2023-2026 approved on 2 March 2023, which envisages an increase in dividends and a treasury share buy-back plan of up to 300 million euros, to be completed by 15 October 2024.

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The economic and financial results of INWIT at 30 June 2024 will be illustrated to the financial community during a conference call scheduled for 31 July 2024 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.

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Pursuant to subsection 2, Article 154-bis of the Consolidated Law on Finance, the Executive 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.

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