-
Boldyn Networks recently closed its acquisition of Edzcom, the private networks business within Cellnex
-
Cellnex has unveiled a strategy dubbed its “Next Chapter”
-
The strategy is based on four strategic pillars, including a commitment to focus on core markets while divesting “non-core business lines”
News that Spain-based Cellnex has completed the sale of its private networks business to Boldyn Networks is just one element of the European tower company’s wider strategy to place itself on a firmer footing for the future.
During its Capital Markets Day (CMD) this week, Cellnex set out how it intends to rebalance its balance sheet, improve key credit ratings and reduce debt after years of tower acquisitions that have turned it into European’s leading tower company, with more than 113,000 sites in 12 markets as of December 2023. Including planned rollouts up to 2030, the number of sites is about 138,000.
When it carried out its initial public listing in 2015, Cellnex was present in just two markets with 21,000 sites. Since then, it has expanded its base through more than 40 deals, as the company indicates in its CMD presentation. Now, it’s time to batten down the hatches and focus on “cementing our leadership” in the European tower industry, as the company puts it.
In Europe, Cellnex primarily competes with Vodafone-backed Vantage Towers, GD Towers, which is 49%-owned by Deutsche Telekom, American Tower, which acquired the Telxius tower division from Telefonica in 2021, Orange Group-owned Totem, and Italy-based Inwit.
Focus on organic growth
Cellnex has already been prioritizing organic growth since November 2022 in order to reduce debt. It has now unveiled a strategy it has dubbed its “Next Chapter,” which is based on four strategic pillars: a commitment to focus on core markets while divesting from “non-core business lines;” prioritizing co-tenancy growth; a comprehensive efficiency drive; and a restatement of its commitment to strong governance and the incorporation of ESG principles.
The private networks sale to Boldyn clearly falls under the first pillar, as does Cellnex’ separate announcement this week that it plans to exit Ireland by selling 100% of its business in this market to Phoenix Tower International (PTI) for €971 million. The transaction is set to close in the second half of 2024.
Other deals to streamline the portfolio include last year’s sale of a 49% stake in Cellnex Telecom’s subsidiaries Cellnex Sweden and Cellnex Denmark to Stonepeak, while PTI has already acquired 2,353 sites in France.
Following the sale of its Irish business, Cellnex will retain a presence in 11 markets, of which the top five already accounted for more than 80% of its sales. In addition, its tower business provides over 80% of sales, with the remainder coming from three other lines including DAS and small cells, fiber to the tower and broadcast. The company also made it clear that it will constantly review its portfolio.
Part of its future strategy will involve the creation of what Cellnex is currently calling a LandCo, which would hold all land assets as part of an effort to maximize value. The entry of a minority shareholder has not been ruled out here.
In the 2023 financial year, Cellnex reported a 15% increase in revenue to €3.66 billion, with adjusted EBITDA rising about 14% to €3 billion. The company added 4,473 sites last year mainly in France, Italy and Poland. Group net debt stood at over €17.28 billion by the end of the year.