Earnings Call: Q4 2017

Feb 16, 2018

Good afternoon, everyone. My name is Juan Gaitán, and I am the Head of Investor Relations at Cellnex. I would like to thank you for joining us today for our 2017 results conference call. I am joined today by our CEO, Tobías Martínez, and José Manuel Aisa, CFO and M&A Director. They will lead today's presentation. We have posted this morning a presentation, which we will refer to throughout our prepared remarks, and then we will open the line for a Q&A session. The total duration scheduled for this session is around one hour, so after this time, our team will be at your disposal to answer any questions. Now, please, Tobías. Well, thank you very much, Juan. Good afternoon, everyone, and thank you so much for your time today. Let me please start this presentation highlighting the main milestones of the year. A year that has been marked by strong execution and market recognition. First of all, I have to say that we are continuing to deliver on organic performance, reaching the upper part of our guidance for 2017. If you remember, our guidance was from 3% to 4%, and we have reached 4%. We are continuing generating a strong recurring levered free cash flow, growing a solid 10% in the year. Third, we are managing a sustainable business model that today offers EUR 16 billion of contracted revenues. So as a result of young and long-term contracts, that improve our business profile. We are executing on our equity story by growing in new and existing markets and reinforcing our industrial partnership with key players. As you know, we are consolidating our market positioning in Spain and the Netherlands. We are executing several transactions in France, in all the countries where we are today. The fourth part is related with the structural flexibility on our approach to fund financing growth. With around EUR 2 billion of available liquidity and a very efficient capital structure. As you can see, we are talking about maturities beyond six years and an average cost a bit below 2%. And finally, we believe that the quality of this execution has been recognized by the market with a share price that has increased 56% in the year 2017. On slide number 5, you can see a very strong performance on our key value metrics. With our adjusted EBITDA growing annually around 25%. And our recurring and levered free cash flow per share growing annually at the similar rate over the last two years. If we move to slide number 6, we are showing you a summary of the principle of the eight deals we have executed in 2017. All in all, we have added 8,000 sites to our footprint on a pro forma basis. And we have committed a total enterprise value of around EUR 2 billion, and we have multiplied our portfolio size since our IPO by four times. It is very important to highlight that the European sector is accelerating on our view, the Cellnex project trying to reach a European platform. So we are envisaging as well 2018 with a very positive perspective. On slide number 7, we can see the results of our growth strategy, with around 70% of our revenues to be generated by telecom infrastructure rather than almost 80% in 2014. Around 60% of our adjusted EBITDA is generated outside of Spain on a pro forma basis. All in all, we are transforming a single country company in a single or mainly a broadcasting company in a telecom outsourcing infrastructure company and really an international and European company. You can see in the left side of the slide the spread of our footprint across the countries where we are delivering today our services. I pass the floor to José Manuel Aisa to move to the business performance. Thank you, Tobías Martínez, and good afternoon, everyone. Moving to slide 9. Total PoPs have increased 22% in the period, including the contribution of both organic and change of perimeter in the year. If we now focus on organic growth only, PoPs and our consolidated customer ratio have increased 4%, at the top end of our medium-term guidance between 3% and 4%. Finally, DAS nodes have increased 26% in the year, and we are optimistic that this new business area will become a significant contributor to Cellnex revenues in the future. Please note that this is the beginning of 5G. Moving to slide 10, you can see the evolution of PoPs and our consolidated customer ratio, with increases mainly explained by consistent organic growth and change of perimeter. We have managed to add more than 1,000 organic PoPs year-on-a-year basis, reaching a customer ratio of 1.55. If change of perimeter is also considered, usually contributing with a lower ratio. Additionally, we are implementing several commercial initiatives to secure future organic growth. We are strengthening our partnership with key customers. We are working under existing framework agreements to secure new tenants. We are implementing new small cells projects and exploring opportunities to provide densification solutions in dense urban areas. Finally, Cellnex has been certified as Zero Outage Supplier by Deutsche Telekom. Let me now please explain on slide 11 our recurrent levered free cash flow generation in the period. I would like to start highlighting that the cash conversion ratio of EBITDA into recurrent levered free cash flow has been a strong circa 80%, with a significant margin expansion of 400 basis points in our EBITDA margin. Moving to revenues, the contribution from telecom services and broadcasting increased, with a very well-managed cost base, leading to an adjusted EBITDA increase of 22%. Maintenance CapEx is in line with our guidance. Our change in working capital is slightly positive. Interest paid reflect our capital structure as of end of the year. Taxes reflect our management measures in place. All in all, we are providing today a 12% revenue growth, which implies almost doubling our adjusted EBITDA growth when compared to 2016. Moving now to our balance sheet on slide 12, it is important to highlight the strong liquidity position of the company. With circa EUR 2 billion after the issuance of our first convertible bond in January. A very high level of contracted revenues, with a backlog of EUR 16 billion, or in other words, 20 years of revenues or 7 times our net debt. Compared to December 2016, our balance sheet mostly reflects the increase in debt instruments and their associated cash. Proceeds have been used in the execution of our growth strategy. Cellnex leverage as of December 2017 reaches 5.5 times on a net debt EBITDA basis, which includes the full year contribution from the new transactions in both debt and adjusted EBITDA. Moving to our capital structure on slide 13, you can see our current debt maturity profile. Our debt has an average maturity of around 6.5 years. There is no material refinancing before 2022, and we do have a strong protection against interest rate increases as a result of our fixed-rate debt and also our inflation indexation of our revenues. In summary, in relation to our capital structure, I would like to emphasize the following points. A strong available liquidity position of EUR 2 billion, backlog of EUR 16 billion, no required short-term refinancing, loan maturities, highly attractive terms, a compelling business risk profile, and no financing restrictions. This give us access to several alternatives to fund growth, cash from ongoing operations, deals structured in tranches, access to a wide array of debt instruments, financing at project level. Also potential equity partners at the OpCo level. On slide 14, we are presenting to you the main characteristics of our first convertible bond we issue in January. For us, the issuance has been a landmark transaction, allowing us to diversify our funding sources, extend our maturities, and reduce our average cost of debt with the highest conversion premium in Europe. Finally, just a few words on financial outlook in slide 15. We have beaten our 2017 guidance by delivering on all the different contribution lines. On the right-hand side, you can also find a detailed explanation of our adjusted EBITDA performance in the year. You can see the positive impact of the new TV channels being reinforced by the contribution of organic growth and efficiencies, as well as, of course, the change of perimeter. This all together explain the strong adjusted EBITDA growth in the period of 22%. Moving to our 2018 financial outlook, our adjusted EBITDA is expected to reach between EUR 405 million and EUR 415 million. We believe we can provide a recurring levered free cash flow at least 10% higher than in 2017. Our CapEx guidance remains unchanged, and dividends will increase by 10% as per our current dividend policy. With this, we are more than happy to answer any questions you may have. Please note that in the following slides, you will also find the frequently asked questions that all of you raise to the company. Also in our website, a very thorough Excel sheet, and on top of that, of course, the annual accounts with every single detail. Thank you very much. Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press 01 on your telephone keypad. Thank you. The first question comes from Simon Coles from Barclays. Please go ahead. Hi, guys. Thank you for taking the questions. The first one's on France. I saw that you've announced a further 1,000 sites to be built in France. I was just wondering if you could give us some more color on how that came about. Are you seeing more operators willing to cooperate and outsource towers there, as you've had a lot of success so far? Are you going to be able to market those towers immediately to the other operators? That's the first question. On the second one, you're starting to gain scale in France. You already have scale in all your other markets. The only two still to work on, I guess, are U.K. and Netherlands. Is this where you see most scope for upside into 2018? What are you seeing in these markets? What are the opportunities that could potentially materialize? On the third one, I guess it's linked to the other two, but if you could give any more color around how you're seeing operators engage with you. Are you seeing them more open? Are they coming to you now? You said you're confident on more activity in 2018 earlier, Tobías. So any more color around that would be really useful. Thank you. Okay. Yeah, several questions, Simon. Let's start with number one, and I think it's very similar to number three, so I will tackle both of them at the same time. Yeah. Yes, you are right, and your understanding is correct. We have reached an agreement to build to suit up to 1,000 sites in France, and this is very well explained in slide number 18. If you compare slide number 18 with our capital markets day, you will see that we have included a green box that tells you when Cellnex thinks is going to implement this new agreement. As you can see, it will take later in this period. So it will not be before 2021. Yes, it is true. It's a new agreement will take place between 2022 and 2023. This is again, very linked to your third question, which was about if MNOs are more open to work with us. The answer clearly is yes. Step by step as Cellnex commits and performs and gives a good service to our clients. These clients, current clients, and potential new clients are more open to explore further collaborations with Cellnex. This is the philosophy of Cellnex, long-term agreements on a win-win basis. There was one remaining question, Simon, which was your question number two. It is true that today we are in the process of building a scale both in the U.K. and Netherlands. We are pursuing several opportunities in both countries. Maybe in the U.K., it is true that maybe our focus is trying to provide solutions for densification in dense urban areas. So maybe in the shorter term, you should expect more focus on organic growth rather than M&A. We are pursuing several paths in the Netherlands in order to continue growing our portfolio. That's great. Thank you. Thank you. The next question comes from Jonathan Dann from RBC. Please go ahead. Hi there. Thank you for the question. There's two. I think toward the back of the slides, you talk about EUR 42 million of CapEx for, I guess, purchasing leases in advance. I guess my question is, does that directly impact OpEx in 2018? My second is, I guess there now appears to be a lot of tower portfolios for sale, France, Italy, Portugal, Netherlands. Are you able to narrow down the range of entry? What are we likely to hear from you guys around those portfolios? Hi, Jonathan. How are you? Thank you for your question. Listen, yes, you are right. In the last quarter of the year, we have somehow accelerated our efficiency program through a land acquisition execution. Yes, of course, this should be somehow considered in our OpEx of 2018. It is true that when you invest money, you don't get everything the first day. You get everything step by step. But yes, it is true that this is an investment that should have impact. Regarding your second question, it's an open question. You talk about France, Italy, Europe in general. Jonathan, you know very well the company. We do have two kinds of deals. Those deals that are visible, and all the market is keeping an eye on them. Other deals in which we are proprietary, and we like working step by step with the client. Many times the client is already a client, and many times the client is a new client. What I can tell you is that in the first type of deals, we are obviously working, we are obviously devoting time to be prepared. At the same time, on the second side of the deals, we are also very focused on giving solution and also trying to the table or bringing to the table all the value from Cellnex. I can tell you that between these two kinds of deals, visible and non-visible, they are in the geographies you were explaining, in all of them. What I can tell you is that everything is Western Europe, and this is what we think is our main focus. Can I ask a follow-up on the land? Was it the EUR 42 million? Was that a series of different acquisitions or was it one block? A series. It's a series. Okay. It's several. Thank you. Sorry, John, if you refer to the expansion CapEx, as you know, what we are trying to do here, mostly across Spain and Italy, we are deploying a tool which is called cash advances. Land acquisitions is something that we are pursuing as well, but the majority of the CapEx that you are seeing today being deployed is used for prepaying many years of use in advance. Yes, you are right. Thank you. Excellent. Thank you. The next question comes from Giles Thorne from Jefferies. Please go ahead. Thank you. I have three questions, please. I wanted to start with Iliad. Iliad has shown again and again that it does not really feel the need to own passive infrastructure, but ironically, it now owns quite a lot of it with Xavier Niel and JJ acquisition of Eir in Ireland. My question is, do you see anything structural about the Irish market that you dislike, and could your framework agreements, in Italy and France, be a blueprint for Ireland? My second question was around 5G. Your ambitions are clearly building, and very quickly, but it seems that across Europe, there is a chronic lack of fiber infrastructure running to macro towers. To date, you have shown mild interest in fiber backhaul investments. Will this change as you prepare Cellnex to become the industrial partner of choice for 5G? Finally, on Germany and Deutsche Telekom, Tobías, you described in interview recently that the relationship with Deutsche Telekom Capital Partners was strategic rather than financial. What did you mean by that exactly? Thanks. Hi, Giles. Thank you so much for your questions. The short answer on your first one, today, we are not pursuing any specific opportunity in Ireland. Okay. Second question was on fiber. Yes, fiber. Yes, of course, you know that, Giles, you know perfectly well that Cellnex is an industrial player. We are fully aware of the characteristics of the 5G and all the requirements, not only regarding the fiber to the tower, also regarding the data centers and many other angles that have to be really working on time. The answer is yes, this is a step-by-step process, and we are working several angles. I can tell you that our clients will be fully prepared to face this challenge and to face this opportunity in the best condition. Maybe Tobías. Well, coming back to your question about Deutsche Telekom. Well, nothing different. You know that we have a very good relationship with them, thanks to our Swiss project. This is a fact. This is a real project, and this is the best way to show what can we do for them managing the passive infrastructure, but no further commitments so far. This is the reason why my comment was that we have a very good relationship, we have a strategic relationship, of course, where partnership in Switzerland is not based on financial issues or financial objectives. It is more in order to get a real case, a real opportunity to know better each other. So far so good. But up today, anything else. Did they ever tell you why they left the Dutch towers in a separate subsidiary after they put Tele2 and T-Mobile together in that country? It is a sneaky question. Well, this is a question for Deutsche Telekom, not for- Very good. But, obviously, for us will be an attractive opportunity. Why not? We are a tower company. We have, if I may, a very small footprint in the Netherlands, and for us will be an opportunity, but it is just maybe an aim rather than a reality. This is the reason why I am very prudent, telling you that this is just our aim. Today, I cannot tell you that we have any agreement beyond all that. Thank you very much. Cheers. Thank you. The next question comes from Ottavio Adorisio, from Societe Generale. Please go ahead. Hi. Good afternoon. A few more questions on my side. The first one is on Build to Suit. Looking at your numbers, it looks that Build to Suit have consumed around EUR 52 million of CapEx. I couldn't find a lot of details in terms of the tower that's been built and also some granularity about the future. You guide on maintenance and the growth CapEx, but my understanding that BTS is not included. If you can just give us a bit of colors how the profile for BTS CapEx will evolve in the next couple of years. The second one is tied up on this one, because for the first time, also provide the upside the BTS project gives to you, and it's pretty difficult to grasp from a chart, sort of EBITDA you are thinking to achieve in 2023 from BTS with Bouygues. That will be good if you can give us a bit of colors on a number, even if it's a range. Does that number include any additional BTS that could be triggered by the ARCEP announcement in January? The very last one, it's basically on a free cash flow and EBITDA guidance. You guiding for an EBITDA that mid-range of guidance will be in excess of 15% and free cash flow above 10%. You also tell that maintenance CapEx will remain relatively in line as percentage of sales, and you kept the interest rates lower in the recent financing. I was wondering, is any reasons for us to assume that free cash flow will be grow less than EBITDA into the new year? Is there anything to movements on working capital or taxes that could dilute the growth from EBITDA rather than just enhancing it? Thank you. Ottavio, thank you for your questions. Let me start by the end, because maybe you have split the questions into blocks. The second one is regarding the free cash flow and how it compares with the EBITDA growth. Yes, you are right. I think that when we give the guidance of recurrent levered free cash flow, we say to you more than 10%. More than 10% does not mean 10% or 11%. We do think that evolution of EBITDA and the evolution of recurrent levered free cash flow will be coherent. So there is nothing related to working capital. There is nothing relating to tax. That also will be in the same line. There is nothing related to maintaining CapEx that we are saying circa 3%. The only thing that you have to estimate well is the interest expense, so it is quite straightforward. I think that, again, you know that we are a prudent company. We tend to maintain the information you give to you, in this case, last year. So the main way to present things. Yes, you are right. Everything will be coherent, and in one year time you will see that your question was right and the answer also coherent. Maybe, Juan Gaitán, you can help us in the first block of questions. Yes. If I recall properly, there were three questions on Build to Suit. On the EUR 52 million, we have explained this quarter. The vast majority is devoted to the Build to Suit program we have already announced with Bouygues Telecom. As you know, at the moment of the first deal we announced, the 1st of February, there were two tranches. The acquisition of 1,800 existing sites, plus the construction of 1,200 sites. While we believe that the contribution in terms of EBITDA of this sites to be built will be seen later, and this relates to your second question. We are still incurring some costs. So you are beginning to see the costs associated with that program. Since I would say those two projects, with Bouygues Telecom in France and then Sunrise in Switzerland, are very well identified and quantified to the market. So that is why we are providing this information, not included in our traditional expansion CapEx. On your second question, the reason why we are providing a curve is, well, to give the idea that this will be a gradual process, as I explained earlier. We have several windows of transferring existing sites. This is why our towers in France are growing because of this agreement we have with Bouygues Telecom. Then on top of that, there is a five-year program in order to end up building these 1,200 sites for Bouygues Telecom. Given that we do not really have visibility on when we will be having these towers in place, that is why we believe that this process will be gradual. But in any case, the final picture in terms of EBITDA is the sum of the different tranches we have already announced to the market. On the ARCEP, it is upside. This is a very recent news for us. We believe that it is an opportunity. As you know, we already have an industrial partnership with Bouygues in France, so anything we can do for them, we will continue to do so with other operators as well. It is a matter of talking. If we find the right angle, happy to help them. It is a very quick follow-up. The build-to-suit, I remember when in the early stages during the IPO, you also give a bit of granularity about that it is not a straightforward exercise because you identify, they have to buy the land and they all do the permits. How is basically been your experience so far in France with Bouygues and Sunrise in Switzerland? Very good because Bouygues has a lot of experience. We are working, and we are facing together in this build-to-suit program. I think this is the key element in order to reach all the objectives. The same with Sunrise, when we factorize 400, we have already contracted 400 build-to-suit in Switzerland, is in a five years plan. So we are using, if I may, the current suppliers of Bouygues, the current suppliers of Sunrise in order to take all the experience and the benefit of using these existing partners. That's fine. Thank you. The next question comes from Albert Pranger from Keplern. Please go ahead. Thank you, gentlemen. A small question, a bit more practical. It builds basically on my previous colleague with regards to build-to-suit and the existing towers in France. I was just wondering, as of 31st of December 2017, how many towers of the existing towers had been transferred, and how many build-to-suit were actually already constructed? Then more on the debt side. I remember having a discussion with Juan on the amount of debt you could issue. You were allowed by statutory or by board approval to issue a convertible of EUR 750 million. You issued EUR 600 million. Does it imply that without having additional board approval, you can issue the remaining EUR 150 million? Then a more strategic question in the sense that what kind of structural leverage level would you feel comfortable with, especially in light of potential rising rates? Thank you. Thank you, Albert. Short answer on your first question. As of the end of 2017, we have in France 1,600 sites. Remember that in 2016, we already agreed with Bouygues Telecom the acquisition of 500 sites. So these 1,600 sites we have in France is the combination of the initial 500 sites we acquired in 2016, plus 1,300 coming from the bigger deal we announced in February 2017. Now, José Manuel Aisa. Yes, regarding the debt question. It has to pass, first of all, regarding the convertible bond delegation of the general assembly meeting into the board of directors. According to the Spanish law, the maximum delegation is EUR 750 million. This is in fact the delegation that the board of director of Cellnex has. As you suggest, once we have issued EUR 600, our current delegation for convertible bonds accounts for EUR 150 million. So yes, you are right with your maths. Regarding the debt and the capacity to go into more debt. We have assessed this question every single quarter, and it is a good question. But I think that it has to be framed in the right context. I do think that when we talk about net debt to EBITDA, when we talk about leverage, we have to frame this within the business risk profile of the company. The business risk profile of Cellnex since the last three years has changed dramatically, has improved significantly. This has allow us to maintain or to improve our net debt EBITDA, to increase our net debt EBITDA, and at the same time maintaining a very similar or the same credit quality. We have prepared some slides, 21, 22, 23, and 24 to answer the question. If I go to the key point, I will say to you, when assessing the leverage of Cellnex, please note that we do have EUR 16 billion of contracted revenues. This means seven times our net debt. This is the first concept, I will say. Second, please note that our business risk profile is very strong. It is not excellent yet, but it is very strong. You know that as the more strong the business risk profile is, the better or the higher the net debt can be. Our management, all the team, is focused on improving the business profile. Finally, in slide 23, you will find our capacity to delever the company every single year. You can see that this accounts for 0.6 times net debt EBITDA of the leverage every year. All of this is helpful when estimating the potential firepower of Cellnex. I think that these slides give answer to you. One last clarification, Albert. My previous answer was not complete. We today have included, as of December 2017, 13 sites coming from the Build to Suit program with Wind. Okay? Yes. Okay, great. Thank you, guys. The next question comes from Henrik Herbst from Credit Suisse. Please go ahead. Thanks very much. I had two questions. Firstly, I was just wondering if you could talk a little bit about Italy. You obviously have decent PoP growth, about 5% at base in 2017. But you are not growing revenues. I guess you have headwinds from, I know the CommsCon revenues can be a bit lumpy, and also Wind 4G installations, sort of one-off type revenues. Then you have energy pass through. Can you talk a little bit about what the underlying site leasing revenue trends are? Also about how we should think about the comps as we go into 2018. Presumably that business can go back to top-line growth, hopefully. The second question is the deal you made with Sanef on managing the motorway sites. How come it became a management agreement rather than a straight acquisition of the sites? Is this just sort of a try out how it works, and you can do more similar deals? Or was this just basically an opportunity that came up, and you went for it? Thanks very much. Thank you, Henrik. Maybe on the last one. This is part of a concession. The degree of involvement we can take is very limited. This has been opportunistic. They continue to own the sites. We will be commercializing them, and there will be a revenue-sharing mechanism in place. In any case, we are not expecting a significant impact. It has been opportunistic, and we are happy with the outcome. On Italy, you need to remember that when we presented the Galata transaction, there were three different layers of revenues from Wind. One is the base fee, the second is the electricity fee, and the third is the LTE revenues, the adaptation works for the network. in 2015, we did not adapt as many towers as we would have liked. We caught up in 2016, so we managed to adapt all of the sites planned for the year, plus those we could not in 2015. In 2017, we are coming back to a more normalized level. Hence, I would say that this decline in this specific service is offset by organic growth. That is why you do not really see the increase in revenues. We do have the organic growth, we do have CommsCon performance, but a slight decline in the LTE revenues we are receiving from Wind. On the decommissioning, well, you know that we have two different agreements in place, and you should be seeing the progress in this year, in 2018. Okay, thanks. Thanks, Juan. So, what you call the organic growth, what was that growth rate as we exited the year? 11- If you strip out the LTE installations. Around 4%. Around 4%. The LTE installations, as we go into 2018, it will be on a pretty similar level to 2017, or? That is correct. Okay. All right. So 4% is sort of the run rate going into, as we look at 2018. Yep, correct. All right. Thanks. Thank you. The next question comes from Sebastiao Morais from Banco Finantia. Please go ahead. Hi, good afternoon. Thank you for the presentation. I have a couple of quick questions. First one, I would like to know how do you see the possibility of M&A in the near future? What is your willingness to that? And the second one, if you have any plan to buy new towers for this year. How would you plan to finance it, if so? That's it. Thank you. Okay. Your first question regarding M&A. Well, listen, you have seen at the beginning of the presentation what we have done in 2017. It's a step-by-step process. We are working different deals. I think that all these deals that we are working, for us, what is very important is not only the deal itself, but the M&A criteria. The M&A criteria has to be met, which means that at the end of the day, our business profile has to improve. The equity IRR has to be at least low double digit. And of course, the recurring free cash flow per share has to be accretive from year two, three onwards. So you must have more cash per share. So yes, focus on M&A, but also on the methodology of M&A in order to bring you new numbers in the different quarters that are more compelling. Your second question, to be honest, I have not been able to understand it in detail. So if you could repeat, I would appreciate it. Sure. Thank you for the answer for the first one. I would like to know if you have any plan to buy new towers. Okay. If so, how would you finance it? Yes. We do have plans to buy the towers. It is very similar to what I said before. Yes, we are watching different opportunities. But we are very strict in terms of M&A, so both things have to be understood at the same time. How to finance, you can find in the presentation that as of today, we have EUR 900 million of cash at our hand. So I do think that we should take advantage of this money. Okay. Fair enough. Thank you very much. The next question comes from Giles Thorne from Jefferies. Please go ahead. Well, thank you very much for the extra question. It was just the one. It would be interesting to know that out of the towers that you have purchased from Bouygues, how many came from within the infrastructure sharing JV that they have with Altice SFR, and how much came from the outside of that JV? If any did come from within the JV, what was any difficulties around SFR acceptabilities about those being sold? Thank you very much. Hi. Thank you, Giles. I will answer the first one, and then José Manuel the second. On the first one, remember that the big deal we announced with Bouygues Telecom, the vast majority is rooftops in big cities in France, and then there is a bit of sub-project attached. It is true that out of the initial 500 sites we acquired in 2016, a small portion of them were coming from the JV. I guess that we are now somehow used to deal with the situation. The reality is that only a very small fraction of the towers we are acquiring are coming from that JV. On the second one. On the second question, that SFR. Yes. Well, you know that Altice seems to be interested in selling down towers, but we do not have yet all the details of the process. I do think that we have to wait a little bit. As soon as we receive the process letter and all the details, we can share with you, but it is nothing right now. This is a visible deal, it is true, but there are other deals for sellers that can be very interesting. We have to balance everything here. I wasn't actually directly asking about the rumored Altice deals in Portugal or France. It was just, what was Altice's attitude towards you buying towers out of the JV? You managed to buy some out of the JV, and presumably, they're comfortable with it. Can we assume that they wouldn't be a block to buying more out of that JV? I don't know, because our towers from Bouygues do not belong to the JV. Or just a little portion, so maybe it's not the big portion. It's another thing. Very good. Thank you. Okay. Thank you. The next question comes from Fernando Cordero from Banco Santander. Please go ahead. Hey. Hello. Good afternoon, and thank you for taking my two questions. The first one is related with broadcasting. Just taking into account the performance in the fourth quarter, and also what has happened in the third, I would like to know what are your views on 2018 or look for this ARCEP or for this business. The meeting will be dropping in the second half is also the same as we should assume for 2018. The second question is related with the inorganic or with the sector activity in 2018. I agree that the outlook is quite intense. I also would like to see or to share with you at which extent you are seeing more or less competition for assets, given the activity that we can expect for 2018. I do not know if you are seeing new players looking into the European market, other potential buyers for the ARCEP that could put up for sale. Just to share your views on that front. Thank you. Thank you, Fernando. On your first question, what we are seeing this quarter is, I would say, the full quarter impact of the change of scope of service we provide to one specific customer in Spain. So we saw some impact in Q3. We are seeing the full impact in Q4, and that should give you the base level for Q1 2018. We are not expecting any more decreases in this business line. The second question, we are not envisaging a change of the competitive tension in the market. Obviously, it depends on the country and the ARCEP. We will see what happens in France or in Portugal or in other countries. Maybe the type of ARCEP or the country could attract more competitive tension. But from our point of view, everything remains with the same level of competitivity. Yes. Okay. Fair enough. Many thanks. Thank you. Ladies and gentlemen, there are no further questions in the conference call. I now give back the word to the company. Thank you. Well, we have now reached the end of the session, and I would like to thank you all for your time today. As always, the investor relations team will be at your disposal to answer any remaining questions. Thank you so much, and have a lovely weekend. Bye-bye. Bye-bye. Thank you.