Source - LSE Regulatory
RNS Number : 1622Q
Vodafone Group Plc
24 February 2021


Vodafone Group Plc  Vantage Towers ITF

24 February 2021 

Vodafone confirms Intention to Float Vantage Towers

·    Vantage Towers AG's listing and first day of trading on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard) is expected to be before the end of March 2021

·    Planned IPO to target a meaningful minority free float to create a liquid market for Vantage Towers shares

·    Vantage Towers is a leading tower infrastructure company in Europe with approximately 82,000 macro sites across 10 countries with the #1 or #2 tower market position in 9 of its 10 markets

·   Vantage Towers is focused on deploying the full potential of its market leading tower infrastructure to serve the increasing demand for connectivity across Europe, driven by data growth, 5G roll-out and regulatory coverage obligations

·   Vantage Towers enjoys highly visible organic growth, margin expansion and cash generation; with additional value creation potential from investment beyond the core business (including diversifying Vantage Towers' service offering into areas such as fibre backhaul, IoT and edge computing) and from strategic M&A  


Vodafone Group Plc announces today that it will proceed as planned with an initial public offering of Vantage Towers AG, a leading tower infrastructure company in Europe. Vantage Towers AG will seek a listing on the Regulated Market of the Frankfurt Stock Exchange (Prime Standard), and the offering will consist solely of a secondary sell-down of existing shares held by Vodafone GmbH.

Subject to capital market conditions, the Vantage Towers IPO is expected to be completed by the end of March 2021. The target free float of a meaningful minority share is expected to create a liquid market for Vantage Towers shares.

Vivek Badrinath, Vantage Towers Chief Executive, commented:

"The IPO is an important milestone and sets the foundations for the next stage of our growth within the dynamic towers industry. We will be looking to capture the exciting value-creating opportunities the sector has to offer and to build on our position as a leading tower infrastructure company in Europe. With our superior grid, inflation-linked revenue - secured for the long term - and our strong balance sheet, we have a powerful base to move forward and support our customers' need for better and more extensive connectivity across the continent."

Vantage Towers' Investment Highlights:

·      A leading European tower infrastructure company

·      Benefiting from strong and resilient underlying demand within a growing towers market

·     Highly rated customer base - including Europe's largest mobile operator as Vantage Towers' anchor tenant - secured   with network sharing agreements

·    Growth underpinned by long-term, inflation-linked contracts with tenants, new build tower commitments and       increasing demand for tenancies

·      Highly attractive financial profile with margin upside and cash flow generation supporting shareholder returns

·   Clear focus on strategic growth through investment beyond the core business and through M&A, led by an   experienced, independent and commercially-driven management team

A leading European tower infrastructure company

Vantage Towers is a leading European tower infrastructure company with controlling or co-controlling interests in companies that own and operate approximately 82,000[1] macro sites across 10 European markets. In 9 of these 10 markets, Vantage Towers ranks either first or second by number of sites.

Vantage Towers believes that the high quality and strategic locations of its sites - built by Vodafone over many years, with a strategic priority of having superior network differentiation - makes them attractive to tenants. They will appeal both to current market participants and to new market entrants looking to expand their networks and respond to densification needs and coverage obligations. Furthermore, Vantage Towers' average tenancy ratio of 1.39x across its macro site portfolio in its consolidated markets as of December 31, 2020 underpins substantial co-location and upgrade potential. This provides significant capacity for growth of its customer base and tenancies. In the first 9 months of the year to 31 March 2021, Vantage Towers demonstrated strong commercial momentum by adding c.1,400 new tenancies, including c.500 previously non-committed tenancies which represented approximately one quarter of the non-committed tenancies needed to achieve its medium term tenancy ratio target of >1.50x.

Benefiting from strong and resilient underlying demand within a growing towers market

Vantage Towers benefits from having leading positions in markets in which densification needs - driven by mobile data growth and 5G roll out, and government-mandated coverage obligations - are increasing demand for additional tenancies and new sites. Vantage Towers is on track to build c.550 sites by 31 March 2021 and has commitments to build a further c.7,100 new macro sites across its consolidated markets by 31 March 2026.

The European tower market is in the early stages of its evolution and Vantage Towers believes that its high quality infrastructure, which offers superior locations and nationwide coverage, is well-positioned to benefit from the market's growth. The commercialisation of tower infrastructure companies, while a developing trend in Europe, has substantial room for growth when compared with other more mature towers markets like that in the United States.

Highly rated customer base - including Europe's largest mobile operator as Vantage Towers' anchor tenant - secured with network sharing agreements

Vantage Towers' customer base is underpinned by its anchor tenant relationship with the Vodafone Group, Europe's largest mobile operator by mobile subscribers, as well as relationships with other leading mobile operators. Approximately 95% of Vantage Towers' pro forma revenues for the twelve months ended 31 March 2020 and the nine months ended 31 December 2020 were derived from mobile operators that hold investment grade credit ratings, providing secure and resilient cash flows. Vantage Towers' relationship with the Vodafone Group is supported by secure, long-term, inflation-linked contracts, which are expected to provide predictable and growing cash flows over the medium- and long-term.

In addition, active network sharing arrangements in place between Vodafone and other leading mobile operators means Vantage Towers provides critical infrastructure for two of the largest mobile operators in each of the markets in which it operates. Vantage Towers believes that these arrangements are differentiators that provide significant protection against the risk of decommissioning from future site consolidation in these markets, both from the trend of increasing active sharing in Europe or the in-market consolidation of mobile operators.

Growth underpinned by long-term, inflation-linked contracts with tenants, new build tower commitments and increasing demand for tenancies

Vantage Towers' inflation-linked contracts with Vodafone and long-term contracts with other leading mobile operators, combined with its BTS commitments and right of first offer on Vodafone new build macro sites over and above these commitments, secure visible and resilient revenue and cash flows from its existing business with "built-in" growth.

Vantage Towers has secured commitments to construct c.7,100 new macro sites in its consolidated footprint over the next five financial years with Vodafone and Wind Hellas in Greece. Through its co-controlling joint ventures in Cornerstone and INWIT, it also has commitments for a further c.1,200 sites in the United Kingdom over the next four years and c.2,400 sites in Italy, which INWIT is targeting to build by the end of 2026.

Highly attractive financial profile with margin upside and cash flow generation supporting shareholder returns

For the year to 31 March 2020 and the first 9 months of the year to 31 March 2021, Vantage Towers' pro forma Adjusted EBITDAaL was €513 million and €394 million, respectively, representing a pro forma Adjusted EBITDAaL margin of 54% for both periods, and Vantage Towers' pro forma Aggregated Adjusted EBITDAaL was €730 million for the year to 31 March 2020.

Vantage Towers believes it has the ability to increase its margins as a result of its operating leverage and expected cost efficiencies.

Over the medium term, Vantage Towers is targeting a mid-single digit revenue (excluding pass through revenue) compound annual growth rate, an Adjusted EBITDAaL margin in the high fifty percentages, and a mid-to-high single digit compound annual growth rate of Recurring Free Cash Flow. As of 31 March 2021, Vantage Towers is targeting a leverage ratio (defined as Net Financial Debt to Adjusted EBITDAaL) of 4.0x.

Clear focus on strategic growth through investment beyond the core business and through M&A, led by an experienced, independent and commercially-driven management team

Vantage Towers has a clear strategy with multiple levers for growth that prioritises expanding and evolving its product portfolio and relationships with existing and new customers. Vantage Towers believes there is additional value creation potential from investment beyond the core business and diversifying into areas such as fibre backhaul, IoT and edge computing. Vantage Towers is also exploring growth through incremental organic investments in addition to its stated guidance around the BTS and GLBO programmes and/or strategic M&A. It has €1 billion of leverage capacity for such opportunities, which can be complemented by the issuance of equity.

Vantage Towers' management team has significant technology and mobile network infrastructure experience and extensive relationships within the mobile industry. The management team is supported by a robust corporate governance framework that affords it significant independence and a management incentive plan that targets growth in non-Vodafone revenues.

Capital Structure and Dividend Policy

Vantage Towers has been assigned an investment grade rating by each of Moody's and S&P and has committed external financing ready to be put in place upon completion of the IPO. The Company is on track for a 4.0x leverage ratio at 31 March 2021, enabling it to balance growth, investments and returns. Vantage Towers' dividend policy is to pay out 60% of Recurring Free Cash Flow (including dividends from joint ventures) annually and intends to a pay a dividend of €280 million in respect of this financial year, to be paid in July 2021. This capital structure and dividend policy will ensure Vantage Towers retains leverage capacity for organic growth beyond the business plan and/or strategic M&A while providing for an attractive cash distribution policy for shareholders.

Governance Information

The Supervisory Board of Vantage Towers comprises nine members, of which four are independent, led by independent Chair Dr. Rüdiger Grube. The other independent members of the Supervisory Board are Katja van Doren, Chair of the Company's Remuneration & Nomination Committee, CFO and CHRO of RWE Generation, Chuck Green, Chair of the Company's Audit, Risk and Compliance Committee, former CFO of Crown Castle and a founder of the African tower company Helios Towers and Terry Rhodes, founder and previously CEO of Eaton Towers, the pan-African tower company.

The Supervisory Board members are diverse and bring deep expertise in the towers sector and across the telecommunications industry, alongside strong operational and M&A experience and high standards of financial and technical expertise.

IPO Syndicate

Vodafone and Vantage Towers have engaged BofA, Morgan Stanley and UBS as Joint Global Co-ordinators, and Barclays, Berenberg, BNP Paribas, Deutsche Bank, Goldman Sachs and Jefferies as Joint Bookrunners.

About Vantage Towers

Vantage Towers is a leading towers company in Europe with approximately 82,000 macro sites in 10 countries, connecting people, businesses and devices in cities and rural areas.

The company was founded in 2020. Its headquarters are in Düsseldorf, Germany. Vantage Towers' portfolio includes towers, masts, rooftop sites, Distributed Antenna Systems (DAS) and Small Cells. By building, operating and leasing this passive infrastructure to Vodafone and other network operators, Vantage Towers is making a significant contribution to better connectivity and the sustainable digitization of Europe.

For more information, please visit our website at, follow us on Twitter at @VantageTowers or connect with us on LinkedIn at

About Vodafone

Vodafone is a leading telecommunications company in Europe and Africa. Our purpose is to "connect for a better future" and our expertise and scale gives us a unique opportunity to drive positive change for society. Our networks keep family, friends, businesses and governments connected and - as COVID-19 has clearly demonstrated - we play a vital role in keeping economies running and the functioning of critical sectors like education and healthcare. 

Vodafone is the largest mobile and fixed network operator in Europe and a leading global IoT connectivity provider. Our M-Pesa technology platform in Africa enables over 45 million people to benefit from access to mobile payments and financial services. We operate mobile and fixed networks in 21 countries and partner with mobile networks in 48 more. As of 31 December 2020 we had over 300 million mobile customers, more than 27 million fixed broadband customers, over 22 million TV customers and we connected more than 118 million IoT devices. 

We support diversity and inclusion through our maternity and parental leave policies, empowering women through connectivity and improving access to education and digital skills for women, girls, and society at large. We are respectful of all individuals, irrespective of race, ethnicity, disability, age, sexual orientation, gender identity, belief, culture or religion.

Vodafone is also taking significant steps to reduce our impact on our planet by reducing our greenhouse gas emissions by 50% by 2025 and becoming net zero by 2040, purchasing 100% of our electricity from renewable sources by 2025, and reusing, reselling or recycling 100% of our redundant network equipment.

For more information, please visit, follow us on Twitter at @VodafoneGroup or connect with us on LinkedIn at

For more information, please contact:

Investor Relations                                                 Media Relations                                                                                          

Registered Office: Vodafone House, The Connection, Newbury, Berkshire RG14 2FN, England. Registered in England No. 1833679 


Basis of Preparation

KPIs and financial terms

A number of Alternative Performance Measures ("APMs") are presented in this announcement. These APMs, which are not considered to be a substitute for or superior to IFRS measures, provide stakeholders with additional helpful information on the performance of the business.

Adjusted EBITDA is operating profit before depreciation on lease-related right of use assets, depreciation, amortization and gains/losses on disposal for fixed assets, and excluding impairment losses, restructuring costs arising from discrete restructuring plans, other operating income and expense and significant items that are not considered by management to be reflective of the underlying performance of Vantage Towers.

Adjusted EBITDAaL is Adjusted EBITDA less recharged capital expenditure revenue, and after depreciation on lease-related right of use assets and deduction of interest on lease liabilities. Recharged capital expenditure revenue represents direct recharges to Vodafone of capital expenditure in connection with upgrades to existing Sites.

Aggregated Adjusted EBITDAaL is Adjusted EBITDAaL for the operations in which Vantage Towers has a controlling interest plus Vantage Towers' ownership share of the Adjusted EBITDAaL of INWIT and Cornerstone.

Net Financial Debt is defined as long-term borrowings, short-term borrowings, borrowings from Vodafone Group companies and mark-to-market adjustments, less cash and cash equivalents and short-term investments and excluding lease liabilities.

Net Financial Debt to Adjusted EBITDAaL is Net Financial Debt divided by Adjusted EBITDAaL for a rolling 12-month period.

Recurring Free Cash Flow is Recurring Operating Free Cash Flow less tax paid and interest paid and adjusted for operating working capital.

Recurring Operating Free Cash Flow is Adjusted EBITDAaL plus depreciation on lease-related right of use assets and interest on lease liabilities, less cash lease costs and maintenance capital expenditure. On a pro forma basis cash lease costs are calculated based on the sum of depreciation on lease-related right of use assets and interest on lease liabilities that were incurred by Vantage Towers excluding the effects from lease reassessment of the IFRS 16 lease liability and right of use asset on the sum of the associated depreciation on lease-related right of use assets and interest on lease liabilities, which have a non-cash impact in the respective period. Maintenance capital expenditure is defined as capital expenditure required to maintain and continue the operation of the existing tower network and other Passive Infrastructure, excluding capital investment in new Sites or growth initiatives.


"Active Equipment"

customer equipment used to receive and transmit mobile network signals, which is attached to Vantage Towers' Sites


built-to-suit arrangements which corresponds to committed new build site programs and related services that have been contracted with different clients, including ad-hoc capital expenditure which might be required


Vantage Towers AG

"Consolidated markets"

the European tower infrastructure business in Germany, Spain, Greece, Portugal, Romania, Czech Republic, Hungary and Ireland in which Vantage Towers has a controlling interest


Cornerstone Telecommunications Infrastructure Limited


distributed antenna system, which is a network of spatially separated antenna nodes connected to a common source that boosts wireless connectivity within a geographic area or structure


the requirements for enhanced connectivity within a specific area


ground lease buyout


Infrastrutture Wireless Italiane S.p.A.


Internet of Things

"Macro sites"

the physical infrastructure, either ground-based or located on the top a building where communications equipment is placed to create a cell in a mobile network including streetworks and long-term mobile sites

"Passive Infrastructure"

an installation comprising a set of different elements located at a Site and used to provide support to the Active Equipment, examples include power supply, security and equipment cooling systems


the Passive Infrastructure on which Active Equipment is mounted as well as its physical location

"Small Cells"

low-powered radio access nodes used in the completion of macrocells and in areas of high traffic concentration

"Tenancy ratio"

the total number of tenancies (including both Vodafone and another mobile network operator where there is existing active sharing on a macro site) of Vantage Towers divided by the total number of macro sites





This announcement constitutes neither an offer to sell nor a solicitation to buy securities. The planned offering and listing of the shares of Vantage Towers AG on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) will be made solely by means of, and on the basis of, a securities prospectus which is to be published. An investment decision regarding the publicly offered securities of Vantage Towers should only be made on the basis of the securities prospectus. The securities prospectus will be published promptly upon approval by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and will be available free of charge from Vantage Towers, Prinzenallee 11 - 13, D-40549, Düsseldorf, Germany, or on the Vantage Towers website).

The information contained herein does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any jurisdiction.

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada or Japan. This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States, Australia, Canada or Japan. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act").

The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. There will be no public offer of securities in the United States.

In any EEA Member State, other than Germany, this communication is only addressed to and is only directed at "qualified investors" in that Member State within the meaning of Article 2(e) of Regulation (EU) 2017/1129 (the "Prospectus Regulation").

In the United Kingdom, this publication is being distributed only to and is directed only at persons who are "qualified investors" within the meaning of Article 2 of the Prospectus Regulation as it forms part of retained EU law in the United Kingdom as defined in the European Union (Withdrawal) Act 2018 (as amended) (i) who have professional experience in matters relating to investments falling within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) are persons who are high net worth bodies corporate, unincorporated associations and partnerships and the trustees of high value trusts, as described in Article 49(2)(a) to (d) of the Order or (iii) persons to whom this communication may otherwise be lawfully communicated (all such persons together being referred to as "Relevant Persons").

The securities are available only to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be available only to or will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

Forward-looking Statements

This announcement contains "forward-looking statements" within the meaning of the US Private Securities Litigation Reform Act of 1995.

Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as "will", "anticipates", "aims", "could", "may", "should", "expects", "believes", "intends", "plans", "prepares" or "targets" (including in their negative form or other variations). By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. All subsequent written or oral forward-looking statements attributable to Vodafone or any member of the Vodafone Group, including Vantage Towers AG or any member of Vantage Towers, or any persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. No assurances can be given that the forward-looking statements in this document will be realised. Any forward-looking statements are made of the date of this announcement.

Subject to compliance with applicable law and regulations, neither Vodafone nor Vantage Towers AG nor BofA Securities Europe SA, Morgan Stanley Europe SE, UBS AG London Branch, Barclays Bank Ireland PLC, Joh. Berenberg, Gossler & Co. KG, BNP PARIBAS, Deutsche Bank Aktiengesellschaft, Goldman Sachs Bank Europe SE and Jefferies GmbH (together, the "Underwriters") nor their respective affiliates intend to update, review, revise or conform any forward looking statement contained in this announcement to actual events or developments whether as a result of new information, future developments or otherwise, and do not undertake any obligation to do so.

This announcement contains certain pro forma financial information of Vantage Towers for the year to 31 March 2020 and the first 9 months of the year to 31 March 2021 (together, the "PF Financial Information"). The PF Financial Information has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and does not, therefore, represent Vantage Towers' actual results of operations. Such information may not, therefore, give a true picture of Vantage Towers' results of operations nor is it indicative of its results.

This announcement also contains certain financial measures that are not recognized under International Financial Reporting Standards ("IFRS"). These non-IFRS measures are presented because Vantage Towers believes that they and similar measures are widely used in the markets in which it operates as a means of evaluating a company's operating performance and financing structure. They may not be comparable to other similarly titled measures of other companies and are not measurements under IFRS or other generally accepted accounting principles.

This announcement does not purport to contain all information required to evaluate Vantage Towers and/or its financial position. Financial information (including percentages) has been rounded according to established commercial standards. Certain market positioning data about Vantage Towers included in this announcement is sourced from third party sources. Third party industry publications, studies and surveys generally state that the data contained therein have been obtained from sources believed to be reliable, but that there is no guarantee of the fairness, quality, accuracy, relevance, completeness or sufficiency of such data. Such research and estimates, and their underlying methodology and assumptions, have not been verified by any independent source for accuracy or completeness and are subject to change without notice. Accordingly, Vodafone and Vantage Towers expressly disclaim any responsibility for, or liability in respect of, such information and undue reliance should not be placed on such data.

The Underwriters are acting exclusively for Vantage Towers and the selling shareholder and no-one else in connection with the planned IPO. They will not regard any other person as their respective clients in relation to the planned IPO and will not be responsible to anyone other than Vantage Towers and the selling shareholder for providing the protections afforded to its clients, nor for providing advice in relation to the offering, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the planned IPO, the Underwriters and their respective affiliates may take up a portion of the shares offered in the planned IPO as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of Vantage Towers AG or related investments in connection with the planned IPO or otherwise. In addition, the Underwriters and their respective affiliates may enter into financing arrangements (including swaps or contracts for differences) with investors in connection with which the Underwriters and their respective affiliates may from time to time acquire, hold or dispose of shares of Vantage Towers AG. The Underwriters do not intend to disclose the extent of any such investment or transactions, other than in accordance with any legal or regulatory obligations to do so.

None of the Underwriters or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this release (or whether any information has been omitted from the release) or any other information relating to Vantage Towers, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this release or its contents or otherwise arising in connection therewith.

References to Vodafone are to Vodafone Group Plc and references to Vodafone Group are to Vodafone Group Plc and its subsidiaries unless otherwise stated. References to Vantage Towers refers to Vantage Towers AG, its subsidiaries and equity investments. Vodafone, the Vodafone Speech Mark Devices, Vodacom and The future is exciting. Ready? are trade marks owned by Vodafone. Vantage Towers is a trade mark owned by Vantage Towers. Other product and company names mentioned herein may be the trade marks of their respective owners.





[1] Reflects 100% of INWIT's macro sites and 100% of Cornerstone's macro sites




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