Global COVID-19 Scenario …………………………………………………………….. 11 .
ESG Cellnex strategy ………………………………………….. …………………………………………. …………… … … 40
Economic indicators ………………………………………… …… .. …………………………………… … 58
Ethics and Compliance ……………………………………………………………………. …………………………………………. ……… …………. .. 90
Investor relations ………………………………………………………… …. . ………………………………………. 110
Cellnex Human Resources Strategy ………………………………………………………… .. ………………………………………… …………………………… 119
Occupational health and safety …………………………………………………………….. ……… .. …………………. 139
5. To be a propagandist of social progress …………………………………. ……. …………………………………………. . …… 146
Social contributions ……………………………………………………… ……………. ……………………………. …………… ………….. 148
Influence…………………………………………… …………………………………………. . ………………………………………… ………….. …… 168
Rational use of resources ……………………………………………………… ……. .. …………………………………. …….. …171
Biodiversity …………………………………………… ….. . …………………………………………. . ……………181
customer…………………………………………… …………………………………………. . .. 186
provider ………………………………………… . …………………………………………. . …………………………………………. …………………. 195
9. Accessories………………………………………. ……………….. …. …………………….. …………………………….. …………… …………….. 209
Annex 2. Risks ……………………………………….. …….. …………………………………… ……….. …… ….. 212
Annex 3. GRI content index ……………………………………… …. . …………………………………………. ………. .. 241
Appendix 5. SASB Topics……………………………………….. …… ……………………………………….. 257
Annex 6. KPI table ………………………………………. …….. …………………………………… ……………………. …. … 259
2020 has been marked by historic health, social and economic challenges caused by COVID-19. These circumstances have forced everyone to take a big step forward in digital communication as an essential tool for business and social relationships. How would you summarize the impact of the pandemic on Cellnex?
BERTRAND KAN COVID-19 has had a devastating impact on the lives of people and companies, including loss of life, work, business and community activities. We are fortunate because the telecommunications sector, especially infrastructure, has played a key role in mitigating the impact of the crisis by increasing the resilience of society in general and business in particular. Overall, network and infrastructure operators have been able to increase capacity through massive investments in unprecedented network deployments in recent years. Fiber optic connections and high-speed mobile technologies have increased data consumption exponentially. This bond has fostered personal and professional intimacy in historically isolated times. Cellnex has benefited from and contributed to this digital transformation, much of which is likely to continue.
TOBIAS MARTINEZ We support our customers by enabling them to serve their users 24 hours a day, 7 days a week, changing network management activities daily. In Spain, for example, we have moved from two large control centers in Madrid and Barcelona to 200 small nodes scattered around the homes of employees responsible for maintaining the network. We have revolutionized the way we operate, ensuring service continuity to pre-pandemic standards.
Radio and television signal transmission and management services are also particularly important to the public during the pandemic, as their record ratings are fueled by a thirst for information.
While our growing business has not been affected and has actually increased, we have noticed some slowdowns in some day-to-day processes due to blocking difficulties. Periodic delays and some license extensions, such as a second digital dividend or spectrum auction. However, we exceeded the targets we set for ourselves at the beginning of the year, including our revision of forecasts when we released our half-year results.
TM As I said, we improved our forecast for the year and were able to end the year with 55% revenue growth, 72% EBITDA growth and 75% solid cash flow growth. This result reflects a significant increase in the company’s scale in response to growth momentum in 2019 as we see some ventures in 2021 and 2022, such as the six-country partnership with CK Hutchison announced in the 2020 agreement. But, in addition to expansion, we managed to keep our organic growth rate at 5.5%, so we had a good fiscal year in terms of performance.
TM Obviously, we have not given up on our growth goals. But I want to make it clear that in our model, fusion itself creates inorganic opportunities. We have repeatedly stated that we are not financial investors and insist on our role as industrial partners. Our long-term client relationships ultimately drive our M&A growth. Much of the sourcing business is based on our strategic relationship with them. In fact, more than half of the €25 billion we have invested
In the five years since our IPO, we have worked hard to strengthen our relationships with clients who have asked us to cooperate. These investments allow us to grow in new markets and expand into others where we already exist.
BK We started 2020 early with the announcement on January 2nd of the acquisition of OMTEL in Portugal with new partners and geographic markets. In April, we acquired NOS Towering from the Portuguese mobile operator NOS, strengthening our presence in the country. This summer we completed the acquisition of Arqiva’s telecommunications business in the UK. In addition to these acquisitions, we continue to invest in our customer relationships as mentioned by Tobias, including the February agreement with Bouyguesin to provide fiber optics in France, an €800 million investment in Poland with Iliad and last but not least, this the largest acquisition in our short history, a €10 billion deal for CK Hutchison’s European buildings in six countries.
TM The last three lines of business represent our vision of the industry very well, as they are directly based on trusting relationships with clients who, based on their experience of recent years, want to work with us to manage the infrastructure in the markets in which they operate. This strengthens our position as a strategic element and partner in their value chain.
For example, our relationship with Hutchinson began a month before the 2015 IPO, when we acquired 7,500 Wind sites in Italy shortly before integrating into WindTre.
So this five and a half year supply of services has led Hutchinsons to enter into exclusive negotiations with us for a global partnership project in what we call these six European markets.
In this alliance, we balance the integration in our three existing countries – Italy, the UK and Ireland – into three new markets – Austria, Denmark and Sweden – with the help of our strategic partners, who have become under the business of the largest client.
In terms of your diversity and innovation policy, what do you see as the most important milestones this year?
TM Geographically, we continue to diversify across markets. At the end of 2019 we were operating in 7 countries, and now, a year later, we plan to operate in 12 countries, which is a very important milestone in the diversification of our market and customer base.
For example, integrating operations like Metrocall into Madrid’s metropolitan transport system combines diversity and innovation, reinforcing our commitment to connecting major transport networks, similar to our Milan and Brescia metro network projects in Italy, or more recently the Netherlands’ National Rail network.
Overall, in terms of innovation, we continue to bet on the vectorization of 5G as part of the revitalization of the industry. We develop the capacity, experience and technical know-how to use the necessary skills to implement private or corporate intranets and manage operations from a port in Bristol to a multinational chemical company in Spain through interesting international pilot projects. Increasingly, we will see how private 5G networks in industrial settings will not only increase their performance, but also drive the adoption of this technology.
Our commitment to innovation also plays a role in startup capital for activities that we believe have potential for our lines of business. This year, we have invested in companies that operate two key complementary elements of the 5G infrastructure ecosystem: Long Term Evolution (LTE) private networks and edge computing. We have acquired Edzcom, a Finnish private networking company, and participated in an investment round from Nearby Computing.
In a difficult year for many public companies, Cellnex broke the cycle and its stock rose 38%. After raising a total of €3.7bn through two rights issues in 2019, you completed your largest capital increase to date, and in August 2020 you were well oversubscribed by €4bn. How far can you go?
The timing of BK Cellnex’s IPO in 2015 was well-timed as the European telecommunications market was poised to restructure the operator’s balance sheet and sell tower assets. As a specialist tower operator, Cellnex has worked closely with mobile operators to acquire and expand a portfolio of towers spanning 12 countries over these five years. Despite rapid growth, financial discipline was key to our strategy; whenever we have opportunities to create value to grow our business, we raise the capital and debt needed to grow. We have been fortunate to have strong shareholder and capital market support for our strategy, and we look forward to continuing to deliver strong results for them.
BK Our greatest desire for 2021 is to reach a tipping point in the midst of the pandemic crisis. Therefore, we hope that the world can return to normal in social and working life. Cellnex will continue its growth strategy, which may become more complex as more operators enter the European market. We are optimistic about the continued demand for tower infrastructure in Europe, and this trend is further fueled by accelerated digital transformation. In terms of macroeconomic indicators, there is hope that 2021 will be a watershed year for GDP with strong growth after a limited level of activity in 2020. We are optimistic that the overall GDP and capital market environment will remain positive for Cellnex’s business and strategy.
TM Our priority this year is to integrate growth projects that are fundamental to our success. Over the years, we have accumulated a rich experience of teamwork to ensure the expected return on investment.
Otherwise, from a strict perspective of Cellnex dynamics, we expect our performance to be at least as strong as in 2020 and that we will be able to continue with growth projects, although 2019 and 2020 will be difficult to follow in terms of acquisitions.
Given that we have achieved our goals in 2020, the normalization of economic and social activity will allow us to restore organic growth rates.
Values, sustainability and purpose seem to have become one of the hallmarks of the company at a time when corporate social responsibility is highly valued by large investors. Can you summarize this year’s activities in this area?
BC In fact, we cannot consider ESG (Environmental, Social Responsibility and Governance) as something independent of the day-to-day management of the company. The Board of Directors is devoting more and more time and resources to ensuring that Cellnex operates responsibly in all important respects. To this end, we have expanded the functions of the former Nominating and Remuneration Committee, now called Sustainability, to oversee and advise policy on ESG matters. We finalized the Corporate Social Responsibility Master Plan 2016-2020, covering over 90% of strategic objectives, and in December approved a new plan for 2021-2025 that clearly defines relevant actions within the framework of the UN Sustainable Development Goals (SDGs).
In addition, within the governance structure, we have established an ESG Executive Committee that is responsible for coordinating and implementing certain activities. These include areas and functions such as talent management and equity, diversity and inclusion policy, and actions related to the environment and climate change strategy, in line with the goals of the Science-Based Goals initiative. We strive to find ways of doing business that benefit our shareholders and society as a whole.
TM The year we are drawing to a close provides us with a unique opportunity to demonstrate our values and social commitment in this regard. In our Board of Directors, we have approved the Cellnex COVID-19 Relief Plan, a €10 million international pandemic relief fund. Half of the donation was allocated to a health research project involving French, Italian and Spanish hospitals on cellular immunotherapy, which has not only shown very promising results in the treatment of COVID, but can also be applied to treat other immune diseases and even treat tumors.
The second tranche of the donation goes to social action projects in partnership with NGOs to help disadvantaged individuals and groups in the countries where we operate.
In 2021, we will launch the Cellnex Foundation to raise awareness of the company’s social impact. This will include undertaking projects such as bridging the digital divide for social or territorial reasons, or betting on entrepreneurial talent or STEM career training and advancement.
Cellnex Telecom, SA (a company listed on the Barcelona, Bilbao, Madrid and Valencia stock exchanges) is the parent company of the group in which it is the leader of companies in various fields of activity and geographical markets Managed by a single shareholder and a major group of shareholders. The Cellnex Group provides services related to the management of terrestrial telecommunications infrastructure through the following business units: Telecommunications Infrastructure Services, Broadcast Infrastructure and Other Network Services.
Post time: Feb-17-2023