Cellnex Telecom SA

MAD:CLNX

Earnings Call Transcript 2019-Q1

[Juan Jose Gaitan Mañoso, Head of Investor Relations]

Good morning, everyone. My name is Juan Gaitan, Head of Investor Relations at Cellnex, and I would like to thank you all for joining us today for our quite special Q1 2019 results conference call. I'm joined today by our CEO, Tobías Martínez; and our CFO, José Manuel Aisa, who will lead today's presentation. As you all know, we have announced this morning a number of deals that are producing a significant leap forward in our growth strategy, and we have been appropriate to make the most of this event and explain also our quarterly results at the same time. This presentation will be followed by a Q&A session and then the Investor Relations team will be at your disposal for any remaining questions. Now I'll hand over to Tobías Martínez. Thank you, Tobías.

[Tobias Martinez Gimeno, CEO, MD & Director]

Hello, good morning, everyone, and thank you so much for your time today. As you know, we have announced today what we call a quantum leap: 3 deals in 3 of our existing 6 countries that allowed us to significantly expand our footprint in Europe, and reinforce our position as the leading independent tower operator in Europe. These agreements include the acquisition of 5,700 sites in France, 2,200 sites in Italy from Iliad and the acquisition of 2,800 sites in Switzerland from Salt, complemented by a build to suit program in each country to facilitate the network rollout of our customers for the next 7 years -- 7, 8 years until 2027. If you move to Slide #4, you can see the magnitude of the new Cellnex when all these deals are closed and upon completion of the different build to suit programs agreed.As a result of these agreements, Cellnex reinforce its leadership position in the European tower landscape. We will manage a portfolio of around 45,000, and we will double our key financial metric.Moving to Slide #5. These agreements are the result of our industrial profile, and they will allow us to strengthen our long-term relationship with 2 more key European players. They are also consistent with our growth strategy and the target set by the company in the context of our recent capital increase.Thanks to these deals, we will be able to create industrial win-win alliance with a long-term focus. Our proposition is unique in the European tower landscape and is based on operational excellence, neutrality, industrial model, industrial approach, and the willingness to create strong ties with all European mobile operators.We are becoming the partner of trust of our clients, and we are proving that initial agreements can create a precedent for more progressive relationships going forward.These deals will significantly change our financial magnitudes with a total perimeter of up to 15,000 sites, including the build to suit program and an upfront consideration of EUR 2.7 billion. We are expecting around EUR 500 million of additional EBITDA, and around EUR 300 million additional recurring leveraged free cash flow on a run-rate basis when all sites are deployed. We are consolidating our presence in 3 of our 6 current markets, and we are maintaining our strict investment policy to ensure value accretive growth.Very quickly in Slides 6 and 7, we want to provide you with the main characteristics of these transactions. We are acquiring controlling stakes in each country, of course, and committed important build to suit programs in order to meet the densification needs of our clients.These deals reinforce our industrial and neutral profile helping our clients accelerate their networks rollout, while fostering telecom infrastructure, sharing among all MNOs. We are signing very long-term contracts with initial terms of 20 years. The closing is expected during the second half of 2019. And as a reminder, our recent right issue give us the financial flexibility to fund all these deals. We are very excited about this growth opportunity, which validates our unique value proposition and strengths our competitive advantage. I will now hand over to our CFO, José Manuel Aisa, who will provide details on our quarterly performance.

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Thank you, Tobias. As we said in the previous quarter and more recently in the context of our rights issue, we were convinced that 2019 was going to be a crucial year for the sector due to the increasing and strategic need for mobile operators to foster more telecom infrastructure [ saving ] as we have proved today. Moving to the details of the quarter, it has been, again a period of solid execution on all fronts. We continue to deliver on organic performance posting a very solid growth. Our financial performance continues to be strong thanks to organic growth, our focus on cost management and the contribution from new assets. All our [ managers ] grow around 10% when compared to Q1 2018, and our backlog, which is EUR 36 billion after the recent deals.We are in a defined and important number of market opportunities in Europe, and Cellnex is easily positioned to continue playing active role in this process. We have issued equity for the first time since our IPO, we've had overwhelming market support. The new deals already provide a strong attrition in terms of recurring levered free cash flow per share. The adoption of IFRS 16 will bring radical change to lease accounting and its biggest impact will be on net debt.Our master service agreement avoids the capitalization of leases and more recently, we have seen credit agencies removing the accounting benefit from selling minority stakes in tower companies.Finally, we are reiterating our 2019 financial outlook. And we will update in due course upon the closing of the deals that we are announcing today.Moving to Slide 11. The quarter is in line with expectations and not substantially different from the strong performance you have seen in previous quarters. So for the benefit of time, I will quickly run through the main highlights. Total PoPs have increased 12% (sic) [ 11% ], including the contribution of change of perimeter. We focus on running thoroughly. PoPs have increased 5%, mainly due to the densification by all MNOs and the contribution from Iliad in Italy.On the Slide 12, you can see the commercial initiatives we have on the table to secure future organic growth. In Italy, we have signed an extended build to suit program with our anchor tenant, a new decommissioning agreement with Vodafone and Iliad is generating organic growth at a strong pace. In Switzerland, we have signed a corporation agreement with Swiss Fibre Net granting access to fiber for mobile backhauling and the deployment of small cells.On Slide 13, you can see the building blocks of our recurring levered free cash flow growth. The positive impact for ongoing growth, including efficiencies, is reinforced by the gradual contribution of sites in France, partly offset by cash elements below adjusted EBITDA, mainly interest paid in the period.All this explains a strong recurring levered free cash flow growth in the period of around 10%. Moving to Slide 14. Our revenues increased by 11%, our adjusted EBITDA by 11% and our recurring levered free cash flow by 10% with our EBITDA margin reaching 68%. We can see that the 11% adjusted EBITDA growth is mainly explained by the contribution from Telecom Infrastructure Service coupled with a very well-managed cost base.On Slide 15, our balance sheet mainly reflects a strong liquidity position of EUR 1.8 billion, following our recent rights issue, which will be used to fund the transactions we are announcing today. Please note that on top of this liquidity, Cellnex has available lines or further EUR 1 billion in term of credit lines with no pledge, not hedge, no guarantee, no covenant So on Slide 16 you can see the details of our debt structure as of May so excluding the capitalization of leasing activities. Our debt has an average maturity of around 5.3 years, very attractive terms and nonmaterial financing is expecting for 2022. And our inflation-linked revenues and fixed rate debt, allow us to expect a positive contribution for future raising inflation.I will now hand it over to for Tobías for a final remark.

[Juan Jose Gaitan Mañoso, Head of Investor Relations]

Thank you very much, José Manuel. We have been reiterating the idea that we are at the tipping point in the telecom infrastructure outsourcing process in Europe. 2019 will be a crucial year for the sector due to a number of structural changes that will accelerate the number of market opportunities as we are proving today.We have a solid track record of value accretive delivery and in a ideal position to continue capturing these massive opportunities in Europe. And with this, happy to answer your questions. So let's please open the line.

[Operator]

[Operator Instructions] The first question comes from Roshan Ranjit from Deutsche Bank.

[Roshan Vijay Ranjit, Research Analyst]

Three questions, please, centered around the deal. Is it possible to get a sense of the multiples associated with the deals. I acknowledge there are many moving parts, 3 different deals and build to suit. But just to get a sense of how we should think about those? Secondly, is it fair to assume that the build to suit with Iliad in France can run in parallel with your existing build to suit program? Or is there scope to, I'm not sure, maybe combine them? And secondly, when you -- and thirdly, sorry, when you refer to recurring levered free cash on the pro forma basis for the deal, is that again based on your CapEx assumption of normalized CapEx, so I think 24% of normalized CapEx? Or would that actually reflect in some of the CapEx associated with the build to suit program?

[Juan Jose Gaitan Mañoso, Head of Investor Relations]

On the first question, the -- I mean, you need to take into consideration that everything has been designed as a whole so the acquisition of stakes in companies that will be managing a number of sites in different countries. Also, we are complementing these initial transactions with quite significant build to suit programs, also in 3 countries. So everything has been designed and negotiated as a whole. So we do believe that it is relevant to think about the infrastructure multiple when everything is completed. Bear in mind that there are -- there is an upfront consideration but that valuation must include EBITDA that is contracted and will come. So we believe that, yes, it makes sense to talk about the multiples now on a run rate basis when everything is completed.In that sense, you should be expecting multiples that heavily align with past transactions, so nothing different from a valuation standpoint. And the second question, Tobias.

[Tobias Martinez Gimeno, CEO, MD & Director]

Well, the second question, we have a commitment of 2,500 of build to suit until 2027. Up today, we have approach, we have make evaluation on a stand-alone basis because we have to understand better where they want to roll out these new infrastructures. So in other words, no synergies has been factorized in this situation. The answer will be yes, we will run in parallel because those build to suit programs of Bouygues and Iliad are different approach in different places. But maybe you are right, we could find some synergies in terms of CapEx and if it's the case, happy to share with our customers as well.But so far it's too early to get a proper assessment on the rollout of these further 2,500 in parallel with Bouygues rollout.

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Your third question, Roshan, remember that our recurring levered free cash flow definition excludes the any expansion on CapEx. So when we talk about that EUR 600 million, obviously we are excluding the, I will say, the CapEx therefore to reach that figure during the first years, and this is important. When the build to suit program is completed, you should no longer be expecting this CapEx therefore. So I guess that once we reach this EUR 300 million that should be basically -- you should be expecting maintenance CapEx in line with the typical metrics of Cellnex group and then some expense on CapEx going forward associated with increasing retention ratio and maturing savings in the country. So when we reach that figure of -- once we reach that point, EUR 300 million of recurring levered free cash flow, going forward you shouldn't be expecting more build to suit CapEx.

[Roshan Vijay Ranjit, Research Analyst]

Okay. And just to follow on there. On the first question, then, I guess, on a full run-rate basis, we're probably looking at a mid- to high teen multiple. Is that fair to assume?.

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

That is fair to assume.

[Operator]

The next question comes from James Ratzer from New Street Research.

[James Edmund Ratzer, Europe Team Head & Analyst]

Two questions, please. You talked a little bit about kind of potential for merging some of the build to suit opportunities. But I was interested in following that up with the potential for decommissioning in Italy and Switzerland. Now you're doing some kind of more substantive in-market transactions there, I mean, what potential do you think there might be for incremental synergies that aren't embedded in the numbers you have today? And secondly, just wanted to now kind of revisit your appetite for future deals after this and what you feel your balance sheet can cope. I mean it looks like in year 1 to sort of roughly speaking take your net-debt-to-EBITDA to around 5x, what would you see as your kind upper threshold at the moment? It's been mentioned in the press you've been linked to looking at Altice deals in Portugal. Is that something that you can still have capacity for at the moment?

[Tobias Martinez Gimeno, CEO, MD & Director]

I will respond to the first question, Well, about the commissioning, in Switzerland, we are not factorizing any of the commissioning project due to the very low electromagnetic threshold and taking into consideration that in Switzerland, the MNOs, they need to improve densification of 4G and obviously coming the 5G, we will require more sites. And in Italy, so far we are in the same situation. I mean up to date, we are not forecasting -- we are not projecting a decommissioning program, but maybe looking from 2 years or 3 years from now, we could develop a certain level of decommissioning if the electromagnetic thresholds comes to, let me say, rational levels of threshold.Otherwise, it would be very, very low, very low decommissioning program. José Manuel, maybe you could reply the second question.

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Yes, regarding the net-debt-to-EBITDA and regarding your question, well, we have been -- I was very clear regarding our finance structure, and we are going to maintain this flexible approach that allow us to, not only to take into account the EBITDA, but also for instance the visibility of the cash flows. One of the key points of this transaction is that, we are right now doubling the backlog of the company and we're improving significantly the visibility of these cash flows and this should have a positive impact in the business risk profile of segments.We have diversified our revenues, broadcasting now is -- once executed everything, will be a small part, even smaller than as of today, and I think that all these are credit positive. So I think, that this is one of the key points, today Cellnex is a much better from a credit perspective than yesterday. And please note that these deals will be closed in H2 2019, so let's go step-by-step, there will be time. Our pipeline is strong and our pipeline will -- when we see that it's going to crystallize, we will do what we have to do. But as we are now we feel very comfortable and better than yesterday

[James Edmund Ratzer, Europe Team Head & Analyst]

That's clear. Thank you. I mean do you have an upper limit though in mind on where leverage would -- could go to, I mean, is 6x still what you perceived as your maximum?

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Look, one of the key things is that day-by-day for me net debt to EBITDA is not as important as before, having EUR 36 million of backlog I can tell you that if we divide our net debt by the backlog, today is better than yesterday. So is this the key credit metric, I don't think so. We are going to retain the financial flexibility, and we are going to do it in a way that creates value for you, that is going to improve everything we are going to do will improve your cash flow percent and this is what I want commitment to.

[James Edmund Ratzer, Europe Team Head & Analyst]

Great. Thank you. And one quick follow-up. You mentioned the backlog, I mean, does that allow for any changes with active RAN sharing or is that embedded into these contracts?

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Well, this is -- sorry.

[Tobias Martinez Gimeno, CEO, MD & Director]

No, no go ahead José...

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

These, our contracts, as you know, and we cannot give -- disclose all the details, but we can share with you what has happened in other markets before. You know that our contracts for instance, those that we signed in Italy back in 2015, are -- have proved bulletproof perfectly no -- perfectly prepared for every kind of scenario.In Italy, we have this merging of one of our main client with a new company and our contract has been solid enough. So I think that Cellnex as an industrial player can recognize the different factors that are taking to come in the market and to build from scratch a contract that perfectly fits the situation, not only as of today, but also as of tomorrow taking into account technologies, dynamics and so on.

[Operator]

The next question comes from Stefano Gamberini from Equita SIM.

[Stefano Gamberini, Analyst]

Just a few questions, if I may. First of all regarding the implied multiple. If I'm not wrong, using the figures -- my math on the figures you reported in Page 18, the additional EBITDA -- cash EBITDA, we can say, after the leases payment is in the region of EUR 304 million, so EUR 510 million is the additional EBITDA in 2027, less EUR 170 million of additional leases EUR 340 million. And if not I'm wrong, the enterprise value of the deal is in the region of EUR 4.7 billion. So is it correct that the EBITDA multiple's in the region of 13x, 14x, first question. The second, regarding the -- what could happen in Italy if in the future Iliad could have -- could be at the merger with another operators, what are the closures you have in this case regarding this kind of deal? The last question regarding still Page 18, your cash taxes that are quite low. What is a normalized level of taxation of your company?

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Stefano, on the -- let me try on the maybe the sequence will be, I will take the first one, Tobías the second, and José Manuel, if that's okay, please the one on taxes.The short answer on your first question is, yes 14x on a run rate basis is the adequate multiple.

[Tobias Martinez Gimeno, CEO, MD & Director]

Well, the second one, we are always raising those subjects, as you can imagine, potential mergers, acquisitions. And we have full protection against of these type of transactions. So again, same with range sharing or with other type of sharing among different telecom operators. So the contract is always built from scratch, as José Manuel said earlier, and we -- Cellnex is always including these subjects on these agreements.

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

You were talking about one of the key points that for us has an important which is the tax management. As you know, we are committed to increase quarter after quarter, deal after deal, our cash flow per share. And yes, tax is one of the key points. Therefore, I can tell you that I feel comfortable that the level of the tax that we are paying in terms of revenues, in terms of the EBITDA is going to be sustainable. It's going -- we -- as we have many times said to you, we pay these taxes because we follow just the law in detail. And we are fully compliant with all the requirements that the tax law is set at in different countries in which we are. And also on top of that because when we execute M&A deals, we try our best to incorporate the tax element into equation. So the answer is yes. We feel comfortable let's go step-by-step. And I think that, that should be working as it has been working today and a key point in order to maximize the conversion of EBITDA into cash flow for our shareholders.

[Operator]

The next question comes from Luigi Minerva from HSBC.

[Luigi Minerva, Senior Analyst]

So the first is on the announced deals. So I was wondering if you can help us a bit understanding the mix and the phasing of the EBITDA? So we know from Slide 6 and 7, what is going to be the adjusted EBITDA after in 2027 once we're at full speed. But can you help us maybe understanding what's the contribution so, for example, the 410 from Italy and France in 2027, how much comes from the existing towers that you buy? How much comes from build to suit? And what is the phasing that we can imagine? And then maybe also the implied EBITDA margin in that number? And then the second question is more on the big picture. And I think what you've announced today and which is great, just confirms that probably all the right counterparties and operator with -- which is under pressure on the balance sheet side.So I was wondering from what you can see in your pipeline, is it the case that the counterpart has to see a trigger in terms of debt pressure or you still find viable to negotiate deals with counterpart potentially simply interested in the value of working with you from an industrial perspective?

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

Luigi, I will take the first one. On the EBITDA expected for year 1, for France and Italy, after IFRS 16, you can assume around EUR 230 million, okay? With a figure EBITDA about [ EUR 70 million ] for Switzerland, okay? The balance, again under IFRS 16, the balance versus the figures we have in the presentation it is basically the contribution mostly coming from the contribution of the build to suit program. And for modeling purposes, you can assume a leaner contribution until the end of the build to suit programs.On the second question, I will maybe look to Tobías.

[Tobias Martinez Gimeno, CEO, MD & Director]

For me, the reasons why telecom operators want to outsource are very clear. First one, it's passive infrastructure are not core business. It's part of the rollout, it's part of the access to the market, but it's not the core business. So make a lot of sense to sell down, to maximize the monetization because it's a rerating of a hidden value as well. So why not to maximize the monetization to reinvest on the core business. And this is, I think, let me tell you a very smart decision from our point of view because the telecom operators could focus on their core business, having long-term partnerships with an industrial specialist as Cellnex.So I think this is an evolution on the value chain, on the different roles of the players. So I don't think it's just a pure financial constrain or issue. I think it's more a strategic movement looking the future.

[Luigi Minerva, Senior Analyst]

Okay. And if I may just a follow-up on one of the previous questions. So just to -- know you said your contracts in Italy are bulletproof so that it mean that effectively if deal with Vodafone transaction goes ahead, and it's completed, there is no -- I mean, what's the extent of the business that you currently take from Vodafone that you could lose as a consequence of that transaction?

[Tobias Martinez Gimeno, CEO, MD & Director]

Not at all. As we said when Telecom Italia and Vodafone announced the deal, we said first make a lot of sense to reach an agreement in order to share 5G rollout, so makes a lot of sense, with passive infrastructure agreements or without, in any case. So this is our point of view.Second one, we are delivering services to Telecom Italia and Vodafone in a normal way because you know that in Italy there are a lot of restrictions in many places. So even in cities below 25,000 inhabitants, we are delivering 1,000 PoPs for them.So even though they have an efficiency plan and agreement in order to improve the passive infrastructures, I think it's -- there is room for improvement to everyone. And having 2 anchor tenants in Italy for us, it works perfectly and happy to continue growing and to delivering services to Telecom Italia and Vodafone as well.

[Operator]

[Operator Instructions] The next question comes from Juri Zanieri from Kempen.

[Juri Zanieri, Analyst]

Actually, only 2 very quick one. I was wondering if the finance of the deal, you already mentioned that you have EUR 1.8 billion coming in from cash and] EUR 1 billion of credit lines. I was wondering if you are willing to finalize -- to finance the deal only with this or partially with debt? And in case if you are willing to use only this cash now, would you be interested in pursuing new deals with debt? The other question, I was wondering if the Iliad tower [ Co. ], there was any debt involved in the transaction? And as last question, considering all the rumors that have been rolling around [ TDS ], I was wondering if such asset can be still considered in your -- of your interests for the months or years to come?

[Juan Jose Gaitan Mañoso, Head of Investor Relations]

Okay, Juri. José Manuel, if that's okay, can you please answer 1 and 2 and then Tobías the last one?

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

So regarding your first question, it was more liquidity questions than any other thing. Yes. You're right about total liquidity, as we talk as of today is EUR 2.8 billion. It is as of today, and we have time until closing of this transaction. So we have plenty of time to improve even further our liquidity if it is required. About upswing with new debt, I mean I would like to refer to the previous question about the net debt EBITDA backlog business risk profile visibility of cash flow. So we do think that is not only the structural flexibility in terms of financing. So I think, that we have to put everything together and it's a little bit more complex that it is more debt or less debt. We will maximize the recurring levered free cash flow per share and on top of that we are going to improve at every single transaction our business risk profile as our credit metrics.So this is our number one. Number two, while these transactions -- and this is -- I think this is a very interesting question because we are an industrial company, this is key. An industrial company is interested in building up contracts from scratch and acquiring towers. So that is involved here. So this is not a transaction in which the seller wants to somehow decrease the total level of debt, and then give us some debt or is just selling a minority stake. No, no, no. This is a pure industrial deal sought in the long term. With that a win, we [indiscernible] spirit and elements like the debt are not playing here a role at all. The only thing -- the only element that are playing a key role in this deal is the industrial element, is what our client want to be tomorrow, how we can help them, how we can reach win-win agreement.And this philosophy, this philosophy or this win-win value creation is beyond metrics, many times it's not about [indiscernible], it is not about if there is debt or not, there is much more value in these deals than what our metric or what our debt can be factored in today these assets, no. You will see that quarter after quarter, we are going to -- as I think we have done so far, commit and deliver.And finally, Tobías, you took the last question.

[Tobias Martinez Gimeno, CEO, MD & Director]

Yes, thank you very much. Well, as you can imagine, this type of transaction is not just about assets, acquisitions or financing constraints. It's also about processes, it's also about people, it's also about operation and industrial model. So it means that we cannot afford in parallel a project like TDS being very transparent and very coherent. So we want to focus in order to integrate our last acquisitions in France, in Italy, and Switzerland. Therefore, we cannot afford again in parallel an acquisition like TDS.

[Operator]

The next question comes from Ottavio Adorisio from Societe Generale.

[Ottavio Adorisio, Equity analyst]

A few questions. The first one, I logged a bit late so I don't know if you already answered. So sorry, about that. But the first one, it's related to the minorities. Basically -- you basically are in line with what you said in the past, you never interested on buying minorities, you're buying controlling stakes. But most of the times, you buy 100%. So here you buy a bit of [ patch ] 70% in France, 90% in Switzerland, 100% in Italy. So I was just wondering, what's the rationale for that and what's the exit mechanism, how they works. I'm sure Iliad probably at some stage would like to sell back the remaining stake. The second one, the Bouygues deal in France was relatively basically deferred over time. So are all these towers all to be transferred on day 1 or they will be transferred over time? The third was on the BTS. You have a significant exposure now to this business so this is a growing business. But I was wondering about the permits, the CEO has basically highlighted that in 2 other markets where exactly you are increasing your footprint have a significant restriction on emissions. So I was wondering, with the BTS you're planning to build are they going to be a straightforward exercise or it's going to be a pretty significant obstacle on getting the -- all the required permits? And the fourth one, it's basically the nature of this M&A. On the positive side, it's basically you're boosting your positioning on the existing footprint. I remember from our last call, we had a nice conversation about potentially expanding in markets like considering a deal like CTIL. So I just was wondering, if you changed anything since then, it's basically -- the commitment is basically to further out the footprint you have at the moment and increasing the exposure towards the clients you have or still big deals like CTIL could be of interest to you in the future?

[Juan Jose Gaitan Mañoso, Head of Investor Relations]

Ottavio, I will start with the second one, which is the -- basically upon completion of this build, we will be transferring in just one step, all of the existing sites and then what they should be expecting [ is our ] contribution from the build to suit programs only. On minorities, I will leave José Manuel, and on the third and fourth it will be Tobias.

[José Manuel Aisa Mancho, CFO & Corporate Development Director]

So minorities. Ottavio, you have been following us from the very beginning, and during that you will recall very well that our first big acquisition which was Galata Towers back in 2015, we acquired also 90% of our joint venture in which, at that time, we had 10% of the company. This is something for us that makes sense, makes sense because this is an industrial deal. And this is a beautiful deal that has been done from scratch and article by article and adapting to the situation of every single market and it makes sense that the operator wants to remain there for a while to understand how we work, to gain comfort. And obviously the medium, long-term he will gain comfort and he would leave. And obviously at that time Cellnex is very well positioned to acquire other stake because we are industrial players and we are a long-term investor. So obviously, it makes sense that we are there. This is not a financial or no one is trying here to build up an IRR in 3 years and then to have our exit to -- no, it's the credit metrics, the value metrics are key in this transaction. But also do not forget that there is a strong and sound investor [indiscernible] of cooperation between different companies. Tobías, maybe you can...

[Tobias Martinez Gimeno, CEO, MD & Director]

So the build to suit -- build to suit permits. So you are right, we are facing a very attractive, but also a huge and challenging build to suit program in France. Also in Switzerland and in Italy as well, but the most important one will be in France, you're right. So it means that we are reinforcing, we are setting our build to suit teams in order to produce and to deliver properly the requirements of our customers. So this is not just a question of Cellnex, just to share with you that, we are working very, very close with Telecom on the build to suit programs. So this experience, let me tell you, will help us in order to replicate, to reuse this experience, the track record in France in order to set an additional team for Elliott. And I can tell you that we have a very good, I think, performance on this difficult matter of building new sites.And permits, obviously are one of the most difficult part of the build to suit program. You are completely right. But it's part of this execution of program in any case, even for the telecom operator in a stand-alone basis, and I can tell you that we are using all the experience of the existing experience in every country of the telecom operators also dealing with smaller and generally firms with site hunters. Again, we are adding on our structure, all the partners coming from the telecom operators.The last question about CTIL. Well, CTIL remain as a focus. I mean U.K. Make a lot of sense, CTIL make a lot of sense. The different topic will be in which conditions, which price, we'll see. We cannot speculate. But if you look at CTIL, much -- all of the requirements as a target for Cellnex. This is the reason why it remains as a target for us CTIL, and U.K. as a country. So happy, happy to improve our footprint. But happy also to improve our existing footprint in France, Italy and Switzerland, and to consolidate also our footprint in those countries because this is the best way to extract as much as possible the efficiency and the synergies among the different type of synergy -- of infrastructures.

[Operator]

[Operator Instructions] There are no further questions. I now give back the floor to the company.

[Juan Jose Gaitan Mañoso, Head of Investor Relations]

Thank you so much. We have now reached the end of the session and thank you for your time today. And for any remaining questions, the Investor Relations teams will be at your disposal as always Thank you so much. Bye-bye.

[Tobias Martinez Gimeno, CEO, MD & Director]

Bye-bye.