Helios Towers plc Helios Towers Annual Report and Financial Statements 2020 Driving the growth of communications in Africa Helios Towers plc Annual Report and Financial Statements Who we are Helios Towers is a leading independent telecoms tower company in Africa, serving the continent’s major mobile network operators. We operate today in five high-growth markets: Tanzania, Democratic Republic of Congo, Congo Brazzaville, Ghana and South Africa. We expect to begin operating in Senegal in H1 2021, and aim to continue expanding our service offering to other markets in the future. We have a strong position in all of our markets, and are the market leader and sole independent telecoms tower company in Tanzania, DRC and Congo Brazzaville. Our vision Our strategic pillars We aim to be the leading telecoms infrastructure Our Sustainable Business Strategy is distilled company in Africa. into three interdependent pillars. KPIs linked to strategic targets within our Sustainable Business Strategy have been indicated Our purpose throughout this report using the symbols Our purpose is to drive the growth of below: communications in Africa. We play a pivotal role in enabling connectivity Business excellence and efficiency and contributing to social and economic development in our markets. Network access and sustainable Our values development Central to everything we do are the Company’s core values of: Empowered people and partnerships • Integrity, always striving to do the right thing. • Partnership with all our stakeholders, based on mutual respect and benefiting from each other. • Excellence, and our constant goal to be the best we can be. For more information go to pages 4-5 Helios Towers plc Overview Strategic Governance Financial Annual Report and Financial Statements 2020 Report Report Statements 2020 highlights Group financial and strategic KPIs Revenue (US$m) Adjusted EBITDAΔ (US$m) +7% +10% 2020 414.0 2020 226.6 Δ Alternative Performance Measures are defined in the Alternative Performance Measures 2019 387.8 2019 205.2 section of the Annual Report on pages 49-51. 2018 356.0 2018 177.6 Operating profit/(loss) (US$m) Adjusted EBITDA marginΔ (%) +$61m +1.8ppt 2020 56.3 2020 54.7 2019 (4.5) 2019 52.9 2018 3.3 2018 49.9 Sites Tenancies Tenancy ratio +5% +7% +0.04x 2020 7,356 2020 15,656 2020 2.13x 2019 6,974 2019 14,591 2019 2.09x 2018 6,745 2018 13,549 2018 2.01x Helios Towers plc Helios Towers plc Overview Strategic Governance Financial Annual Report and Financial Statements 2020 Annual Report and Financial Statements 2020 Report Report Statements Contents Financial Statements Overview 01 2020 highlights 57 Section 172 Statement 02 At a glance 61 Non-financial information statement A year 04 Building a sustainable business 62 Risk management of growth delivery and 06 Investment proposition 63 Principal risks and uncertainties progress 08 Chair’s statement 66 Viability statement Our financial performance 110 111 Helios Towers plc Helios Towers plc Overview Strategic Governance Financial Helios Towers plc Helios Towers plc Overview Strategic Governance Financial Annual Report and Accounts 2020 Annual Report and Accounts 2020 Report Report Statements Annual Report and Accounts 2020 Annual Report and Accounts 2020 Report Report Statements Strategic Report Governance Report Financial Statements 112 Independent auditor’s report 122 Consolidated Income Statement 123 Consolidated Statement of other comprehensive income 124 Consolidated Statement of An integrated Ensuring financial position Sustainable continued governance, Business compliance and 125 Consolidated Statement of Strategy strengthening Driving long-term business growth and social and economic our Board changes in equity development in our markets Our strategic progress 2020 progress in governance 20 21 68 69 126 Consolidated Statement of cash flows 127 Notes to the Financial Statements Strategic Report Governance Report 161 Company Statement of financial 10 Chief Executive Officer’s statement 70 Chair’s introduction position 14 Q&A with our CEO and COO 72 Board of Directors 162 Company Statement of changes 16 Market overview 75 Corporate Governance Report in equity 18 Business model 82 Nomination Committee Report 163 Notes to the Company 20 Strategic progress 84 Audit Committee Report Financial Statements 36 Operating review 92 Directors’ Remuneration Report 166 List of subsidiaries 42 Acquisitions review 106 Directors’ Report 167 Officers, professional advisors and 44 Covid-19: A resilient response 109 Statement of Directors’ shareholder information 46 Chief Financial Officer’s statement responsibilities 168 Glossary 49 Alternative Performance Measures 52 Detailed financial review 01 Helios Towers plc Annual Report and Financial Statements 2020 Overview At a glance Our principal business is building, acquiring Our assets and operating telecommunications towers that Sites are capable of accommodating and powering the needs of multiple tenants. 7,356 2019: 6,974 These tenants are typically large mobile network Tenancies operators (MNOs) and other telecommunications providers who in turn provide wireless voice and data services to consumers and businesses. Our customer 15,656 base includes all of Africa’s ‘Big-Five’(1) MNOs and other 2019: 14,591 large multinational operators and high-growth Tenancy ratio challengers. 2.13x 2019: 2.09x Our infrastructure sharing model, This tower space hosts an operator’s Average remaining contract life supported by our deep expertise in active equipment, such as antenna. Our tower construction, management and contracts are long in tenure, typically power, enables MNOs to roll out lasting 10-15 years, which underpins our 6.8 years coverage and services more quickly business and its future growth. We also and cost-effectively. In turn, this is enter into ground lease agreements Contracted revenues driving the expansion of mobile with property owners to host our sites services in Africa. Our colocation on their land. model reduces the need for duplicate $2,843m infrastructure and therefore has a We operate in some of the world’s positive environmental impact. fastest-growing economies. The MNOs’ Africa’s Big-Five MNOs customer bases are expanding rapidly, We offer comprehensive tower- driven by young, urbanising, growing related operational services, including populations in a continent that has only $2,325m site selection, site preparation, minimal fixed line telephony. • Airtel • MTN maintenance, security and power • Vodacom/Vodafone • Orange • Tigo management. We provide space on Mobile is a catalyst for Africa’s social our tower sites under master lease and economic development, and is a Africa’s high-growth challengers agreements (MLAs) or master tower gateway to global knowledge, culture services agreements (MTSAs). and connection. Helios Towers plays a $486m central role in driving further growth in • Viettel • Africell mobile and connectivity. Other operators $32m (1) Africa’s Big-Five’ MNOs are Airtel, Tigo, MTN, Vodacom/Vodafone and Orange. • c.35 operators What we do 1 Acquire and 2 Initial customer: build towers anchor tenant We grow our tower The anchor tenant places portfolio through their active equipment onto acquisitions, and the HT tower organically through • This anchor tenant owns build-to-suit (‘BTS’) sites the active equipment and • Our BTS model is outdoor cabinet entirely demand driven • HT owns and maintains all • We only construct the passive infrastructure towers after a and power systems contracted anchor order from an MNO 02 Helios Towers plc Overview Strategic Governance Financial Annual Report and Financial Statements 2020 Report Report Statements Tenancy Sites Tenancies ratio Tanzania 3,821 8,625 2.3x DRC 1,895 4,096 2.2x Congo Brazzaville 426 617 1.4x Ghana 978 1,914 2.0x South Africa 236 404 1.7x Senegal Ghana Congo B Tanzania DRC Market leader Senegal (anticipated closing H1 2021). This reflects the acquired portfolio of Free Senegal. Sites: 1,220 Tenancies: 1,275 Tenancy Ratio: 1.0x South Africa 3 Additional customers: 4 Additional equipment: standard colocation tenants amendment colocation tenants Additional tenants add Existing customer on their active equipment a site (anchor tenant onto the HT tower, sharing or standard colocation the tower space with the tenant) modifies or adds anchor tenant additional equipment • Colocations are central onto the tower to our business model • Additional revenues are • Colocations drive generated from the earnings growth with increased space and/or minimal additional opex power requirements of or capex additional equipment 03 Helios Towers plc Annual Report and Financial Statements 2020 Overview Building a sustainable business We provide sustainable solutions for people in our markets across Africa to access the life-enhancing benefits of mobile communications. Through our sustainable business model and strategy, we are driving our long-term growth in a manner that continues to support the development of societies and economies. Mobile communications sit at the Our Sustainable Business excellence and efficiency heart of the world’s sustainable Business Strategy • Innovating for our customers’ needs future. The mobile industry is unique Our positive impact is already • Maximising power uptime to support in that it makes a contribution considerable: our towers create a delivery of a continuous network towards all 17 of the UN Sustainable footprint for mobile coverage for over service Development Goals(1) (SDGs). 109 million people, and our business • Minimising our environmental