Who we are

Connectivity plays a pivotal role in driving humanity's success in the 21st century. As an independent infrastructure operator operator, Cellnex is committed to establishing an efficient, impartial, high-quality telecommunications platform with innovative management practices to propel digitalisation across Europe.

The digital revolution has reshaped human connections, enabling the exchange of ideas

that define today's world and will shape the future. Connectivity empowers individuals, which is why Cellnex champions the removal of barriers, whether in rural villages, bustling cities, small countryside schools or global tech corporations.

Creating opportunities for diverse people, cultures and regions to connect is essential to foster new solutions. Collaborating with its customers, Cellnex strives to bridge distances, ensuring equal opportunities for people to connect and contribute to addressing future challenges. The company aims to generate value for society, customers, shareholders and all stakeholders through an ethical approach rooted in tolerance, respect and cooperation and by adhering to Environmental, Social, and Governance (ESG) criteria.

A next chapter: Strength and commitment

Cellnex is Europe’s leading operator of wireless telecommunications infrastructure, born in 2015 as a result of a spin-off from the telecommunications division of Abertis Group. Subsequently, Cellnex went public as an independent company.

With the escalating volume and complexity of mobile communication services and the development of wireless technology in the digital era, there has been a parallel rise in the demand across Europe for robust and efficient network infrastructure. Since the IPO in 2015, Cellnex has experienced significant growth in Europe, growing from 110,830 sites in 2022 to 113,175 sites in 2023, by executing or committing to investments worth c.40€Bn in c.40 deals, driven primarily by:

• International inorganic growth with a large number of portfolios available,
• Organic asset growth, especially with increasing MNOs and network deployment demands, and
• A low cost of capital that allowed Cellnex to combine various financial resources to enable growth and execute Cellnex vision

Throughout this journey Cellnex has stayed true to fundamental principles that make the company both unique and successful: (i) a capability to execute value-creating transactions, (ii) being an independent operator that offers attractive MSAs to multiple anchor tenants, (iii) long-term, strong and stable revenue visibility, (iv) developing an industrial model with a basis for the integrated management of telecommunications infrastructure, (v) country diversification coupled with local adaptation, and (vi) guaranteeing market credibility and following an investment criterion of financial prudence.

This has led Cellnex not only to extend its footprint to new geographical markets, but also to explore new opportunities beyond the tower, particularly in collaboration with clients.The company achieves this by making the majority of its assets and services more attractive to current and new customers by responding to their needs while simultaneously leveraging the company’s current capabilities.

As a telecommunications infrastructure company, Cellnex has demonstrated visionary leadership by proactively capitalising on the TowerCo European consolidation opportunity that emerged in recent years. This was achieved through the development of a resilient, long-term industrial model, enabling the company to maintain a growth-oriented profile within a favourable macro-economic climate.

Current market momentum

The mobile telecom industry faces a fast-paced and uncertain context that is characterised by (i) the economic and geopolitical context, (ii) technological advances, (iii) the dynamics of the telecommunications industry, and (iv) the regulatory framework.

• The economic and geopolitical context: Inflation is increasing network costs, making it more necessary than ever to seek out efficiencies for sustainability. Pressure on margins could remain and hold through 2025, and increased interest rates are impacting valuations, especially telco infrastructure companies, with sensitivity to higher debt ratios.
• Technological developments: 5G rollouts are ongoing in most European markets leading to significant demand for investments, including the remaining 5G spectrum auctions. Higher demand for capacity densification and additional 5G coverage is expected. At the same time, network topology is evolving for technology advancements on centralised and cloud-based architectures, which could make networks more interoperable and potentially more efficient.
• Telecommunications industry dynamics: Margin pressure, growing Capex demand and ARPU decrease are leading telecom players to explore consolidation movements, which are to be anticipated as opportunities for consolidating market share, diluting structural costs and achieving synergies to sustain their business growth for competitive and financial reasons. In the TowerCo arena, the last consolidation business cycle has finished, and a new one is expected to arrive in the coming years. However, some opportunities remain in specific markets
• Regulation framework: On the one hand, regulators and competition authorities are facing the potential consolidation of key players in the industry in several markets, and obligations and limitations may be expected to remain to ensure competition. On the other hand, spectrum auctions involving coverage obligations and incentives are put on the table to foster 5G development and close the digital divide between territories. Additionally, The European Commission is working on the yet-to-be-published telecoms act (Digital Network Act) which, together with the nearly completed Digital Infrastructures Act, will redefine regulation of the EU telecoms sector.

Directly correlated to all these macro trends, further delayering movements have been reshaping the Telecom industry, and predictably, will continue to reshape it by fragmenting the Telecom stack into further layers.

The different nature of each of the layers drives highly differentiated business models, risk profiles and challenges. Cellnex strongly believes that the positioning of each telecom player and stakeholder within this sector evolution will drive its industrial strategy.

In this scenario:

• Specialised new players may appear or will develop at each layer. (i.e. land aggregators)
• Current players may decouple a layer of their business. (i.e. MNOs' separation of ServCos and stand-alone Network Infrastructure companies)

• Current players may consolidate within a partnership or collaboration within each layer. (i.e. Consolidation of MNOs, creation of dedicated Network infrastructures, JVs and RAN sharing agreements)
• Players on one layer will optimally re-integrate into adjacent layers to become true platforms to third parties.

Growth-Yield profile

With the fast-evolving telecom landscape and changes in the macro environment, the next step in Cellnex’s story includes the prioritisation of variety of business lines in its portfolio and the geographical footprint in which the company is currently present[1], within four differentiated operational archetypes:

• Pure Towerco: with asset class mainly in the passive towerco arena
• Fast Building InfraCo: with asset class and services also in the fibre and edge data centre arena
• Active TowerCo: with asset class and services also operational, including RAN and transmission
• Digital Infraco: with a broader asset class and services beyond the passive towerco arena, such as broadcast, edge data centres and mission critical networks

¹Cellnex is not present in FTTH.

In general terms, the compounded prioritisation of the various business lines in its portfolio and geographies helps Cellnex rebalance its company profile to look at ‘yield with growth’. This involves using generated cash flow not only for selective growth opportunities while simultaneously delivering on client commitments, but also for strengthening the company’s balance sheet, and remunerating its shareholders

Industrial strategy

Cellnex considered several factors when prioritising its portfolio, including, but not limited to:

• Strategic fit, including the business's proximity to the core business model and competitive landscape condition, among others.
• Feasibility, including the associated Capex intensity and the required capabilities, among others.
• Potential impact, including market developments in the business line arena and the right to win on each terrain, among others.

The classification of the business lines resulted in a prioritisation scale of Core, Core+, Selective, and De-prioritised.

Cellnex’s primary focus is:

1. Continuing to develop its organic growth, maximising the use of the company’s shareable infrastructures, especially in its core tower business, without expanding its geographical footprint.
2. Developing the ‘Core+’ passive business by reinforcing its capabilities, being differential, in conjunction with its customers - in particular its anchors - in the markets where the company currently operates. Moreover, continuing to leverage the existing broadcast business.
3. Assessing, being scrupulous, and being disciplined in the devotion and allocation of Capex and on the business performance per market selectively: the further from the core, the more demanding with a delimited risk.
4. Divesting and not considering de-prioritised businesses in all markets that, by their nature, are far from Cellnex's core and strategic fit.

Further developing efficiency levers, is also a must for a better consolidation of Cellnex’s operations, including additional automation of its business processes in its IT systems, along with reinforcement of the company’s land efficiency programme, among others.

Strategy execution

In order to prioritize the value creation for stakeholders, Cellnex is focused on the following key objectives:

• Improve the balance sheet alongside the unvarying commitment to securing Investment Grade (BBB-) credit rating from S&P no later than 2024, and maintaining this credit rating status from Fitch. The selling of minority stakes or full disposals in businesses and/or markets where the opportunity to have growth at scale in the mid-term is limited for Cellnex, is an option to obtain proceeds committed to reducing debt.
• Reduce complexity and removing operationally-complex business lines - which in comparison with Cellnex’s passive-tower core business, (i) are small in terms of business volume, (ii) are too complex to reach the scale, and (iii) are non-core markets or business lines - with the goal of improving Cellnex’s efficiency and simplifying the company’s portfolio.
• Enable expansion and joint efforts by partnering with financial or industrial entities with a strategic fit in selected future ventures that are relevant for the company’s long-term growth.

Asset rotation approach

Cellnex has already taken steps towards the execution of its strategy:

• New industrial and synergetic agreement with SFR in France by combining the deployment of new PoPs on existing and new sites.
• Agreement with Stonepeak to acquire a 49% interest in Nordics to position for future opportunities in these markets.
• Divestment of Cellnex’s private network business with the goal of directing efforts to core activities only and implementing a streamlined management model.
• Potential disposals in Cellnex’s markets to simplify the company’s portfolio and commit proceeds to reducing debt.

Cellnex believes that its industrial strategy will allow the company to make good on its commitments to both the market and its customers, and prepare the company for the next business cycle and future industry transformation.

Cellnex’s new organisational structure

In October 2023, in alignment with its new business strategy, Cellnex presented its new organisational structure, focused on organic growth, operational excellence and the consolidation of the portfolio acquired to date. As a part of this new organisational structure, Cellnex has:

• Created a Strategy department under the leadership of the Chief Strategy Officer (CSO) that will take the lead on business strategy, planning, transformation, and market intelligence.
• Created the position of Chief Operating Officer (COO) to strengthen its commercial and operational capabilities, to whom the following functions will report: Sales Excellence; Innovation, Customer & Product Development & Technology; Operational Excellence; and IT Services.
• Created a stand-alone Regulatory Directorate that will focus on leading all regulatory matters and strengthening Cellnex's position in EU regulatory bodies.

These functions report directly to the CEO and will be part of the Company’s Executive Committee, together with the General Counsel and Vice-Secretary of the Board, the CFO, the Group People Director and the Corporate Communications & Public Affairs Director. Country and Cluster CEOs who report directly to Cellnex's CEO are also part of the Group’s Executive Committee.

Additionally, during the year, various Cellnex countries have been organised into "clusters". This new reorganisation aims to make the structure leaner and more efficient and therefore improve its ways of working, share best practices across the Cluster and foster a single common culture. The support functions that provide services to the business will benefit from this new organisation, generating efficiencies and leveraging capabilities across the cluster.

Cellnex’s Industrial Model

Looking forward, Cellnex’s industrial model is adopting a simpler integration model to the current focus on optimisation. This framework not only enables consistent operations but also contributes significantly to streamlining and optimising processes throughout the organisation – improving the services offered to customers and the daily lives of employees while ensuring value creation for all stakeholders and a positive impact on the environment and society.

The Cellnex Industrial Model:

1. Embodies a standardised approach that ensures replicability, scalability and uniformity, facilitating rapid growth without proportional increases in costs or resources consumption. Therefore, the Cellnex Industrial Model has been the key tool for supporting the Cellnex strategy and ensuring sustainable and scalable growth in the past and will be crucial as Cellnex shifts its focus to create more value and continuous improvement, ensuring efficiency and effectiveness in the way Cellnex operates.
2. Is supervised by Cellnex's Senior Management at corporate and country levels (Global Governance), through a common Management Model for monitoring the strategy, objectives and results. It serves as a supportive element for effective decision-making.
3. It is implemented through the following five elements and is adapted for each department according to its needs: