Good afternoon, everyone. My name is Juan Gaitán, Director of Investor Relations at Cellnex. I would like to thank you all for joining us today for our Q2 2020 results conference call. I'm always joined by our CEO, Tobías Martínez, our CFO, José Manuel Aisa, and our Deputy CEO, Àlex Mestre, who will lead today's session. Throughout our prepared remarks, we will refer to our results presentation and also to the rights offering we have just announced. We will then open the line for your questions, and now I'll hand over to Tobías Martínez. Please, Tobías.
Good afternoon, and thank you so much for your time today. As we published results a couple of days ago, and you had plenty of time to digest our numbers, I'm pretty sure your attention will be today on the capital increase we have just announced. In any case, I would like to share with you briefly the main highlights of this strong quarter before covering the rights offering. We continue to deliver on organic growth, posting again a very solid quarter. I would like to emphasize the resilience of our business model and our ability to generate organic growth and make progress on our build-to-suit programs under challenging circumstances. A strong financial performance with revenues increasing 48% compared to last year. Our adjusted EBITDA is 64%, and our recurrent leveraged free cash flow is 54%, and our backlog reaching EUR 47 billion when all of our deals are closed.
We are reiterating our guidance and also updating it with the expected contribution from Arqiva and NOS this year. With telecom services giving today a strategic status and a more flexible approach to teleworking, the demand for data will continue to increase dramatically in the coming years. This will require operators to be more pragmatic when making future decisions on network needs, prioritizing their core business and generating more opportunities for infrastructure outsourcing. We have delivered on our promise set out last year. Thank you to our two successful capital increases. We have been able to execute our project pipeline while preserving our financial discipline. We are also seeing that the execution of our growth strategy is a self-reinforcing process. New win-win agreements with our partners have a multiplicative effect, increasing the number of opportunities we are able to assess with relevant players.
This is the reason why today we are announcing a new capital increase, because we are confident that we will be able to crystallize value-accretive opportunities in the short term, and because we need the financial flexibility required to pursue them. With this, I will now hand over to our CFO, José Manuel Aisa, who will provide more details of the period.
Thank you, Tobías, and thank you all for your time today. Moving to slide three, just a quick summary of our M&A activity this year. We have already committed to invest around EUR 2.5 billion in 2020, mainly in France and Portugal. We are starting to deploy our fiber-to-the-tower project with Bouygues Telecom in France. We have acquired two nationwide portfolios in Portugal in just four months. We are making progress deploying the new sites committed with our two anchor tenants in Portugal, and we have also signed a number of smaller projects that allow us to further improve our industrial profile, and this brings us to the map on slide four.
When all of our deals are closed and our build-to-suit programs completed, Cellnex will strengthen its position in Europe as the main independent telecom infrastructure operator, managing a portfolio of around 61,000 sites, increasing our financials and significantly improving our business risk profile. On slide seven, you can see a list of the commercial opportunities we are assessing in order to secure future organic growth. We are seeing demand for our services not only in well-established markets but also in more recent markets, with colocation requested by new tenants and discussions around potential new densification solutions. We continue to execute in the area of indoor coverage as a neutral host across Europe, with attractive opportunities being assessed for football stadiums, transport NetWorkS!, or shopping centers.
We are also expanding our 5G capabilities beyond our core business by analyzing opportunities in tower adjacent areas such as fiber-to-the-tower, outdoor small cells, or mobile edge computing. Always with towers at the core of our strategy and only willing to proceed as a natural extension of our relationship with existing clients and expecting the same tower economics. Moving to slide nine, our revenues have increased 48%, our Adjusted EBITDA 64%, and our leverage free cash flow 54%, with our Adjusted EBITDA margin significantly increasing to 60% from 68% last year. If we look at the figures in the table, you can see that this Adjusted EBITDA growth is mainly explained by the contribution from telecom infrastructure services, organic growth, build-to-suit, recent acquisitions, and by the efficient management of our OPEX base. Payment of leases increased due to a larger footprint.
Maintenance CapEx is expected to convert towards our guidance during the year, and interest paid reflects the terms of our debt structure and our available liquidity. Moving to slide 11, you can see the details of our capital structure and our liquidity position as of June 2020. Our debt has an average maturity of around six years. 80% of our debt is fixed, and average cost is around 1.5%, with no refinancing until July 2022. Please bear in mind that these figures do not include the closing of Arqiva transaction in mid-July. Considering Arqiva, our updated liquidity position would be EUR 4 billion, and our net debt, excluding less liabilities, reaches EUR 5.7 billion. When we close all our announced deals, we will reach a backlog of EUR 47 billion, and our debt has no covenant, no pledge, no guarantee. This gives us plenty of financial flexibility to continue financing our growth.
If we move to slide 12, just a quick update on our guidance, where we have simply included the expected contribution from Arqiva and NOS deals in 2020. We are therefore reiterating our previous guidance, and the additional contribution from the new perimeter will make our Adjusted EBITDA and our recurrent free cash flow growth at around 70% compared to last year. I will now hand over again to Tobías to comment on our rights offering.
Thank you, José Manuel. As you were all expecting, I suppose, a few comments on the capital increase we have just announced. Today, we are announcing the launch of a EUR 4 billion right issue to continue executing our European consolidation strategy. A total of 101 million of new shares will be issued at a subscription price of EUR 39.45. That represents a 25% discount to TERP at closing price of today. The capital increase represents approximately 18% of our market cap. As you know, last year, we identified an up to EUR 11 billion pipeline and executed an initial capital increase of EUR 1.2 billion, followed by a second successful EUR 2.5 billion right issue. A total of EUR 3.7 billion in new equity that allowed us to deliver an impressive M&A activity, reaching our target earlier than anticipated.
In parallel, we have identified new opportunities that make our new pipeline very robust and busy, with a volume of opportunities of up to EUR 11 billion again. As a consequence, we are raising in one go the equity we need to continue executing value-accretive M&A, a cornerstone of our value proposition. Our equity story is more robust than ever, with a large and growing tower consolidation opportunity for Cellnex in Europe. A very robust pipeline with an untapped expansion potential across current markets, as well as new clients, new geographies, and new tower adjacent opportunities. We believe that the potential market share increase still to be captured is significant, and that despite building a portfolio of up to 61,000 sites in just five years since our IPO, the market opportunity for Cellnex continues to be massive.
With this, we are now at your disposal to answer your questions, so please, let's open the line.
Thank you, ladies and gentlemen. The Q&A session starts now. If you wish to ask a question, please dial 01 on your telephone keypad. Thank you. The first question comes from Simon Coles from Barclays. Please go ahead.
Good evening, guys. Thanks for taking the question. Clearly, exciting times. So my question is basically focused on the pipeline. The last pipeline number you given, I understood, was a probability-weighted number. I'm assuming this one is the same. So I'm just wondering if you can give us a bit more sort of idea about the composition of the pipeline. So is it now consisting of new opportunities that weren't present before when you gave the last pipeline number, or is it opportunities you saw last year but maybe had a low probability and now that has increased because they've maybe seen the increase in the valuation of assets over the last year and now they're more interested in talking?
Then just on the pipeline again, sorry, is it still majority macro sites, or are we starting to see a sort of shift to more adjacent services, which I think you sort of hinted to in your comments just now? Thank you very much.
Thank you, Simon. José Manuel will comment on your question.
Hi, Simon. Yeah, I think that your question has several angles, so I will try to go step by step. Yes, this is again the same criteria as last year. So EUR11 billion is a weighted probability, and I think we have used exactly the same pattern as last year. So this is super important because there is no any change at all. So you are saying about if there is—I will start for your last point—if there is a shift, there is no shift at all. Not at all. I mean, in this pipeline, you will find exactly the same proportion of tower deals as we presented to you one year ago. So take it for granted, no change. I think that Cellnex has been able to show you that we do have M&A discipline, and M&A discipline has many angles.
One of them is that our business model cannot change, and the tower deals are by far the most important in terms of quantum. So no change, no shift. You were also talking about if these are new opportunities. Obviously, there are new opportunities. In fact, as we go, as we grow, as we receive your support and we can continue our industrial job, we open new doors, and we open new opportunities that there were not before. Last year, we came to visit you as of February, and we said to you, "We need your help because we need to show the money." I think we are in a very similar position at that moment. Our pipeline is rich. Our pipeline has visibility. The company is working from an industrial perspective very well. Now, again, as we were one year ago, we need your help.
We need the help of our investors.
That's very clear. Thank you. Can I just ask one quick follow-up, probably? The discount to TERP is 25%. Seems quite high given the, I'd say, the goodwill you have in the market from shareholders and the sell-side community as well. Is there any reason for why it's so large?
It's last year's year. We did 20%- 19.5%. We are now 25%. This is EUR 4 billion, one shot. The market is not as stable as last year. In the case of Cellnex, we have been in a very good situation, but we do not control macroeconomic impacts, maybe due to, I don't know, COVID or whatever thing. So we have decided to be a little bit more prudent. Also, in terms of irrevocables, last time we were at 36% of irrevocables. Now we are at 18% of irrevocables. So we have a little less irrevocable initially. So we decided to be prudent, and I think that the company, Cellnex, has always been very prudent, setting expectations. And again, we wanted to adapt to these criteria.
Fair enough. Thank you very much for the answers.
Thank you. The next question comes from Akhil Dattani from JP Morgan. Please go ahead.
Yeah. Hi, good afternoon. Thanks for taking the questions. I've got a few, please. Firstly, just on the rights, could you just help us understand a little bit better the timing of how you've made the announcement today? I guess last year you announced one right pre-a deal, one with a deal. Obviously, this is a pretty large right. So is there some specific reason why you've done it this way? Is there maybe a big opportunity that you feel you need to show your ability to fund first before you do it? So just if you can just walk us through the way you've thought about the timing here, that'd be useful. The second clarification was just to follow up to the prior question, which is you talked a lot about this being predominantly towers.
Just any color in terms of the probability-weighted pipeline in terms of in-footprint and out-of-footprint would be useful, just particularly given, obviously, the high synergies from in-footprint deals. The third one is in regards to. I'm sure you've seen the press speculation we've had today that the Benetton family had an offer from infrastructure funds for their stake. I'm just keen to get your thoughts. There's a lot of rumors circulating around potential offers for Cellnex from private equity and infrastructure funds. Have there been approaches? How do you think about this? Kind of what can you tell us on that? Then the very last thing is you've talked about 19% of the offering being pre-committed. I assume that given that number, that doesn't include the Benetton family. I mean, anything you can clarify around who that does and doesn't include would be useful. Thanks.
Thank you so much, Akhil. José Manuel, maybe we can start with the timing.
Yes. I mean, I think in terms of timing, we have picked up the moment in which there was a good visibility of our pipeline. The timing was the best. After our general assembly meeting, we had reset all our delegations in order to carry out a rights issue, giving the rights to all of our shareholders, as always we have done. So I think that you have to consider that before July the 21st, we couldn't do it. We didn't have the delegation. Also, the pipeline before was not as mature as it is now. So it's the combination of these two factors. The market seems to be open. We are not a specialist in market, so we do not control these dynamics, but we do feel it's a good timing in terms of market momentum. So we are going into this direction. It's nothing more.
For us, it's very important that all our shareholders have the right to subscribe their rights because we do think that this capital raise is going to create a lot of value for our shareholders. And we want to give the opportunity to everyone to join us. This is very important. In terms of the out-of-footprint, please take it, sorry.
No, and just to maybe finalize the answer, Akhil, remember that our initial capital increase last year was for EUR 1.2 billion, which we almost exhausted. I mean, that's a powerhouse in just one deal. So given that the amount of opportunity that we have on the table today, we are preparing to, I would say, to try and raise the equity allowed to capture that pipeline in one go instead of coming back to the market constantly.
Yes. No, and maybe to complete the answer, the company is trying to avoid to go twice a year. I mean, this is the reason why we are factoring maybe the next 12-18 months in order to execute our pipeline. So this is the reason why we are reaching EUR 4 billion because the company is trying to avoid to raise new equity twice a year.
Yes.
Let's go to.
Yeah. Your second question, Akhil, was regarding the footprint in terms of countries. I think we are going to follow exactly the same criteria as last year, so if you take where we were at Cellnex last year when we announced these two rights issues, we were in Spain, in Italy, in Netherlands, France, and Switzerland, and as we speak right now, we have improved our presence in these five countries, and we have opened three new countries, which have been Portugal, the U.K., and Ireland, so I'm pretty sure that we are going to follow this pattern. Obviously, we will reinforce our presence. We will consolidate our presence in our core markets. In fact, the vast majority of the money that we have invested has been in our core markets in the last rights issue.
But also, we will try to open those markets that we think are commensurated or somehow make sense for us because there are a client already present in that market, or because we do think from a partnership perspective, this client is in other countries, or from a partnership perspective, this client is strong, and then it makes sense for us. So there will be always good criteria. It's not going to be random. Also, regarding, as we said to you last year, and again, it's the same pattern. We said to you last year that we have different deals in different situations. So in the last prospectus, you could see that we had some deals just in scouting basis, other deals on a non-binding, other binding, other exclusivity basis. So again, in this pipeline visibility, we are finding the same situation. So the footprint is very similar.
The nature of the deal is very similar. Regarding your last question, we cannot comment. I mean, it's something that we keep on working. We do think that the tower market in Europe is in its infancy yet. That Cellnex is going to consolidate this market. And apart from that, if there is any noise, we do not comment. That's helpful.
No, maybe just to reinforce, I'm Tobías speaking. Edizione remains a valuable shareholder of Cellnex with a stake above of 13% after dilution, if it's the case. And Edizione has reiterated its continued support to the company management and the strategy going forward. So in my view, we'll see. But currently, they have to offer their option rights to Atlantia, which has a right of refusal on any disposal of option rights by Edizione, which expires in three business days post-deal being announced. So subject to Atlantia's decision, Edizione will decide how to best monetize the rights in an orderly fashion, taking into account the success of the overall transaction. So I just can tell you that many investors have indicated their interest to potentially acquire further exposure in Cellnex.
This is the information that we can share with you because, as a company, we cannot comment on their motivation. But again, we can confirm that Edizione, again, remains a very valuable shareholder, and they are reiterating its continued support to the company.
Thank you.
Thank you. The next question comes from Andrew Lee from Goldman Sachs. Please go ahead.
Good evening, everyone. Thanks for taking the question. I had two questions. The first one's slightly longer. Just on the firepower that the EUR4 billion raise or potential over-EUR4 billion raise gives you. You've flagged a kind of deal pipeline of EUR11 billion from that. But you say that it includes build-to-suit and additional initiatives, which I would presume includes things like fiber backhaul. I would have thought that your EUR4 billion of equity raise could maybe have funded more, maybe EUR10 to EUR11 billion of tower purchases alone, given that build-to-suit and additional initiatives can be done via CapEx. Just wondered if you've changed what you think the market will allow you as gearing on a net debt to EBITDA basis, or just any color here that you could give us would be really appreciated.
And then just the second question that I'm sure we'll get over the next couple of days is, do you see the same scope for value creation per incremental euro spent on a deal as you look like delivering from the last year or so of deals, or are you seeing greater competition rising for the assets that you want to consolidate? Thank you.
Okay. Many questions. I will try to follow all of them in order to find how it will help me. Regarding the mix of business that we are targeting, it's exactly the same as before. So build-to-suit programs. We have done with the last money you gave us last year, the market gave us last year, we have carried out several build-to-suit programs. And our build-to-suit program right now has 9,000 towers to be carried out in the next years, which is the largest build-to-suit program I see by far in Europe, and I don't know in Western countries, but I'm pretty sure it is. So this is a key part of our pipeline. It's a key part. And you know well that this build-to-suit program has many benefits because also allow us to fund as we go.
Allow us to somehow be more efficient in the way we deploy the equity that the market gives to us. It's a key tool for us. Also, you can see other projects in which we pay more money upfront. Obviously, there must be a combination. And finally, you were talking about backhaul; for us, it is fiber to the tower. There are projects like this, yes, in the same proportion that we have carried out in the last year. So you can see that only one has been with our French client, Bouygues, because we did have those towers, and those towers had to be linked somehow with fiber. Otherwise, I mean, the competition; there is no competitive advantage, or it's not enough competitive advantage. So we have to keep on working with our clients in order to foster their competitiveness. Yes, it's going to be the same pattern.
It's not going to change. Maybe it's very boring, but it is very safe. And also, it's as visible as it was. Otherwise, we were not here asking for the help of investors. You were talking about net debt EBITDA. One thing that targeted, one thing that it has been very clear during the last years, during the last five years when we first came to the market, the net debt EBITDA of Cellnex has been improving step by step, has been a little bit higher. And at the same time, we have maintained the credit quality, the credit quality. And for me, this is, and for us, this is the key point.
It's not only to have more net debt EBITDA, but to have more net debt EBITDA with a better business risk profile, with more capacity to deliver the company, with a financial structure that is fully flexible. So yes, we are going to keep on working in this direction, and we do think we have had room to improve. As you can see in some of the reports of the rating agencies, just to take a reference, they recognize that our business risk profile has increased after our M&A investment, and therefore, our capacity to go more into net debt EBITDA is higher. So for us, this is a consequence of a better business risk profile.
So yes, we are going to keep on working in order to optimize the diversification of our clients, diversification of clients, diversification of the risk, and therefore, our capacity to go more into net debt EBITDA. The last point was about competition. We have always had competition. At the very beginning, if you recall, it was American Tower. Then it was KKR. Now it sounds Phoenix Tower International. The only thing that we do think is that Cellnex continues in every single competitor. They come, they run away, they come, they run away. But the only one who is all day long building up from scratch deals is Cellnex. And this is our proposition to you. It's to be able to, from an industrial perspective, I could tell you.
Thanks. That's really helpful. Just to clarify, just a quick follow-up on the first question. I guess what I really was asking was, you said you've got an EUR 11 billion deal pipeline or up to. But how much do you think, how much, what size of deals or scale of deals do you think you could actually do with the EUR 4 billion of equity raise? Could you actually deploy more capital than that with the equity raise? Or is that the limit that you think you can do with this equity raise?
Yeah. Yes, I will follow the same example as the last year. Last year, we raised EUR3.7 billion, and we did, I think, EUR10.5-EUR10.6 billion of deals. Okay? So it's going to be on the same range. It's going to be on the same range. It will depend on how the deals are structured, but our commitment is to somehow get to the same characteristics. That's the reason why we say up to. Maybe it's more than 11, could be 11.5, but maybe it's 10 or 10.5. So it is not mathematical, but I think last year, capital increases and what we have done is the best paradigm in order to project what is going to be Cellnex with this money, with this new money.
Thank you.
Thank you. The next question comes from Roshan Ranjit from Deutsche Bank. Please go ahead.
Hi. Great. Thank you for the questions. Good afternoon. Two from me, please. Firstly, Tobías, just following up on some of your comments following the AGM yesterday regarding minority stakes. If I remember correctly, previously, I think you said minority stakes may be of interest if there is a clear path to control at some point. Now, I think your comments yesterday were quite definitive in saying or suggesting that minority stakes aren't for us. And again, we've seen stories associating Cellnex with certain portfolios. So can we just get your latest thoughts on the minority stakes? And secondly, going back to one of the previous questions, you've done capital raises two different ways. You've announced it alongside a deal. And previously, your first one was ahead of a deal.
Are you finding that certain MNOs are requiring or wanting to see the kind of financial commitment or financial backing that Cellnex has to maintain this long-term industrial partnership with build-to-suit, etc., over the future years? Or is it, as you said, that there is a very strong pipeline coming up, and you just want to kind of raise the money and deploy it gradually over time? Thank you.
About your first question, our strategy remains the same since the very beginning. I mean, we are not considering minority stakes, at least if this is a clear path control. Clear means commitment, which is not the case. I mean, it's just the exception, if I may, but remains the same, the same strategy since the very beginning. And this is not just about an accounting topic. It's because our role, I mean, we are industrials. We have to consolidate because it's part of our ability to create value. I mean, we cannot be a financial, let me say, sponsor. We cannot be a financial shareholder. So this is the reason why for us, it's, let me say, a clear border or it's a limit.
I mean, for us, the ability to manage the assets, the ability to manage and to run the company, it's key in order to extract the full synergies, the efficiency. Otherwise, it's impossible. And this is the reason why I was very careful about my words in order to say maybe with the exception, but this exception remains the same since the very beginning of having a clear path to control. Otherwise, this is not for us. This is not for us. It's when Cellnex is not the best solution. It's when we are not the best partner for this project.
And then if I may just follow up on that quickly. So in your up to EUR 11 billion pipeline announced this afternoon, is it fair to say that there aren't any probability weightings on minority stakes in there?
Of course. Of course. No minority stakes, any single euro. Doesn't match with our strategy.
Just a quick question, José Manuel, on the.
Back in.
Yes. I can start, José Manuel.
Yes, please.
This is something we saw last year, no? I mean, precisely before deciding to raise equity for the first time since our IPO, we were finding that maybe conversations with counterparties were difficult to make progress on. And given that, I mean, we assign a very high probability of executing on our pipeline, that's why that's how we decided in the end to raise equity for the first time on the back simply of a pipeline and no specific deal behind. Clearly, the success of that capital increase, of that initial capital increase, facilitated many conversations with mobile operators across Europe. And we are of the opinion that we should be experiencing something similar now. José Manuel, you.
No, I fully agree. I think that Cellnex is still, I mean, it has a lot of opportunities and we have to show the money also. So yes, this was a fact. You could see in February that we received the equity ticket 1.2 as of March, and we could see how in May we were announcing the deal. What we are presenting here is a more, I mean, higher number. We are communicating to you that as we have always said, we will require up to 11 months, 18 months, sorry, up to 18 months to deploy this money. This is the same commitment that we have done before with you, but it's following the same pattern. So the answer is yes. Backing for us is important.
Great. That's really clear. Thank you very much.
Thank you. The next question comes from Jakob Bluestone from Credit Suisse. Please go ahead.
Hi, good evening. Thanks for taking the questions. I've got two. Firstly, just coming back to the pipeline, can you maybe give us a little bit more of a sense of what's in there? Is it a few big deals or a lot of small deals? Is it more, are you assuming more sort of tier one operators, or is it sort of more similar to what we have seen in the past? And then secondly, can you maybe just give a little bit more detail on the commitments of directors and members of senior management to subscribe? Is that across the board and senior management, or is it just parts who've committed to subscribe? Thank you.
Okay, Jakob. So now it's the first question. Obviously, Cellnex evolves, and also the capacity to do bigger deals is higher than last year. So I think that as we became present in more countries, we have more opportunities to interact with larger clients. Obviously, we open new doors. So maybe this is one differential topic compared to last year that we are also working with different avenues. And hopefully, yes, one of your pending suggestions that the market makes to us that please try to work with different telcos is going to be, I mean, is our purpose and is our target. So hopefully, we will be able to deliver something on time. And second, regarding our commitment, again, the same pattern as last times.
I think that you will find that the top management of the company fully, I mean, we are all on the same page as we do believe on our equity story. We do think this is the very best investment we can do. So yes, we will be here also with our money.
That's very clear. Thank you.
Thank you. The next question comes from Ahmed Ghaly from Morgan Stanley. Please go ahead.
Oh, yes. Thank you for taking the question and good evening to everybody. Just a couple of questions from my side, please. First, you closed Arqiva a week ago. Can you please maybe just give a quick update on the business and maybe on the financials if there have been any meaningful developments since you announced the acquisition about nine months ago, so I think in particular, I'd be interested in how revenue growth is looking at that business and then second, coming back to the M&A point and in-footprint versus out-of-footprint, there's been a few media articles out there talking about towers for sale in Poland, maybe in Austria, and then the fact that Hutch could look to sell some towers in their six markets in Europe. Can you maybe just say a few quick words about those three specific markets or opportunities, so Poland, Austria, and Hutch.
I'm conscious you have a relationship with Hutchison in Italy. Thank you.
Thank you, Ahmed. Àlex, if you want to comment.
Sure. Yes. Thank you, Ahmed. This is Alex. In relation to Arqiva, you are right. We just closed it a few weeks ago, and probably the most important element to emphasize here is that everything has closed as expected. As you know, there were a set of conditions precedents that were disclosed previously. Everything has been aligned with what was expected, so no surprises at all on this regard. The prospects alongside with the acquisition of Arqiva for Cellnex in the U.K., as you can imagine, are very much encouraging and increasing our possibilities and opportunities, specifically because we were already in a few opportunities already working with our small Cellnex U.K. until now, so we really believe that this will enhance and boost our opportunities in the U.K.
So in that sense, everything is on track and with a very much enthusiastic team joining Cellnex from Arqiva in the U.K. I can take the second one if you want. Yeah. In relation to you mentioned a couple of new countries. So as probably you have heard from us already in the past, is that our first priority is to consolidate in the countries where we are having already presence. Actually, we are doing that very much, and we probably are forced to open our sight of vision beyond our existing footprint. So opportunities in the countries, as you mentioned, could perfectly, if those matches our investment criteria, be in the scouting and actually are in the scouting process from Cellnex. So we are looking at any opportunity that could be coming also in this part of Europe, as you have just mentioned.
Thank you very much for that. If I can just follow up, one thing that's quite unique in Europe is we do have a number of tower JVs, whether it's MBNL or CTIL in the U.K. There's also NetWorkS! out in Poland. There's the infraco between Bouygues and SFR in France. And can you say, would buying a 50% stake in any of those businesses be interesting for you, or would you seek to have 100% of those businesses be a prerequirement? And is it much more complicated to acquire these kind of JVs rather than acquiring single telco-owned assets? Just maybe give us a few ideas because it's such a large chunk of the telco and tower market in Europe.
The JV situation all over Europe is quite interesting because what you may be also identifying is that there are a few JVs unwinding their former agreements, which were, for instance, only linked to a specific technology like 3G. So what now we are also seeing is that part of those JVs are being somehow dismantled. And we have several of those experiences starting to happen all over Europe. So this is, in one way, opening an opportunity because there is part of that trend going on as we speak. In relation to the full technologies JVs as the ones that you have mentioned, we need to be, let's say, ensuring that if we take control, because logically here would apply what Tobías was mentioning before in relation to being able to consolidate a majority stakes, we still can perform our neutral role as industrial players.
And I don't know if 50/50 would be exactly on that direction. Having said that, the possibility of potentially entering into those JVs, it is an opportunity for unlocking value for both partners that potentially, as of today, may be thinking how and when and on which would be the best way for them to crystallize or monetize the JVs because part of the elements that those JVs sometimes are creating is a potential element of more difficulty for the two M&Os to decide when and how to monetize the assets. So the possibility of Cellnex entering into that game and unlocking value for both of the players is also one of the potential ways that we are trying to also make our value proposition.
That's very interesting. Thanks very much, Àlex.
Thank you. The next question comes from Fernando Cordero from Banco Santander. Please go ahead.
Hello. Good afternoon. I'm transporting my three questions, and the three are around the pipeline and the rights issue in that sense. Firstly, you commented about the improving risk profile of the business. I would say that this risk profile is mainly related with not only the counterparty of the deals, but also on the duration of the deals, and I would like to know if the recent trends when seeing deals with no defined maturity continues to be in the negotiations that you are having or in the deals that you are including in the pipeline. The second question is related with the potential structure of those deals.
You have already said that you are not looking for minority stakes, but I would like to know if you are open to still having minorities in the potential deals that you can get having the control on the side of Cellnex. And the last question is related with a comment that you made in the earnings presentation regarding M&A as well, which is a sales reinforcing process. I would like to know at which extent of the current deals that you have in the pipeline, how many of them are already in, let's say, private conversations, and how many are on, let's say, competitive processes in order also to assess the likelihood of these deals. Thank you.
Thank you, Fernando. I will start with the last one, which is easy for us to answer. Unfortunately, we cannot comment. But I agree. I mean, it is true that within this pipeline, we are contemplating opportunities that maybe a couple of years ago were difficult to create. I guess that the message that we want to convey in our presentation is that the more agreements that we reach with partners and the more track record that we build, the more doors we open. Maybe potential partners that were maybe reluctant to start a conversation with us, let's say, a couple of years ago, three years ago, now we are talking. So that's why we do believe that, again, the more we grow and the more track record we build, the more opportunities we find. I will leave José Manuel maybe the first question, but the. Yes, I think. Second.
Yeah. And thank you. The duration of the deals is key for us. I mean, and you know perfectly well, Fernando, you follow us. It's very important because we are long-term investors. So yes, this is crucial. I think it's crucial. And our contract has a standard. And many times, as an industrial player, you need clarity on how long, what the client wants to build up with you in the very long term. So this is important. Then the second question is, of course, I mean, many of our clients, and we have seen this different times, they prefer to remain as minority partners of Cellnex for the first year, let's say, two, three, four, five years. You can see, if you recall, when we acquired Galata, Wind was with us for at least two years, I think, as a minority with 10% of the company.
And so we have seen that there's something similar with Iliad in France or with Salt in Switzerland. We are more than happy to be joined by our clients and also so that they can gain comfort on how we work, how we react, how much value we can create for all of us, first of all, for the client. So yes, we are open. I think it's a good thing for Cellnex, in fact.
Thank you. And just as a follow-up on the duration of the contract. So you confirmed that, let's say, the benchmark contract that you have started to sign during probably the last year, year and a half with this non-defined or not defined end date continues to be the benchmark on your current negotiations.
Yes, yes, yes, yes.
Okay. Perfect. Thank you.
Thank you. The next question comes from Sam McHugh from Exane BNP Paribas. Please go ahead.
Yeah. Hi there, guys. I'm going to ask another question about the pipeline, sorry. So your filing talks about some transactions of more than 15,000 sites in a single transaction, but also building up an acquisition in different stages. And I just wondered if you could expand a bit more what you mean by different stages. Are these different stages with the same seller? And I think you also mentioned potentially issuing more new equity to the seller of towers. How do you think about having an industrial shareholder impacting kind of future pipeline, and how is that coming into your consideration? And then I did actually have a totally unrelated question for José Manuel about less optimization. I don't know if you - oh, I wonder if you could quantify kind of what you think is the less payment reduction opportunity ahead of you.
I don't know if you can say how many leasses you've renegotiated in the last one, two, or three years and what you think the opportunity is going ahead. It would be quite interesting to think about that, especially as leasses are a growing part of the costs. Thanks very much.
Your first question is about, yes, it is true that we are introducing step-by-step some language in our communication regarding transformational deals, different stages. You are right, and this is coherent with one of the previous questions in which you were saying, are the same clients or you are open to talk to new clients? Obviously, we are open to talk to new clients and also current ones, but yes, we can have transformational deals. For instance, in fact, I recall the last in last year, we did have with Iliad, for instance, a transformational deal in three countries, and then they take a stake, as we were saying before, of 30% in Iliad France Towers. Yes, we are open to this. We are open to do it with other telcos in Europe, and we think it's a win-win strategy, as we were just saying.
For us, this is a transformational deal and definition. We will try also to do it with new clients or current clients in our portfolio. When you talk about neutrality, well, it depends how this is structured. I mean, if we were to be, let's call it, let's make it very simple, a company controlled by big telcos, I would say to you that obviously this is not a Cellnex equity story. I mean, you have another proposition in the market, which is INWIT, and has some things that are common, but other things are very different from us. For us, what is key is to protect our organic growth. For us, what is key is to protect our capacity to keep on growing organically and organically with everyone, with no limitation, and this is a big red line. We will never cross this red line.
So we can incorporate different telcos as long as our red lines are considered. And this is very important. But I think that we can collaborate, as we have been doing in the last years, with telcos in different shareholder levels, and we have been able to manage.
Sorry, just to follow up on that first one. Sorry, maybe it's my bad Google translate. I'm not sure. But I think it says that it could be an exchange for cash or issuance of new shares. So I guess we've seen you issuing effectively new shares in Iliad France Towers. But I wondered whether this was issuing shares in Cellnex to the seller of the towers.
At the end of the day, in case of Iliad, we acquired 70% of the shares of Iliad France Towers. In this case, it was not a. It is true. It was, first of all, a contribution in kind, a carve-out carried out by the telco, and then we acquired 70%. It is true that we could find another way around in which finally Iliad had decided to do a contribution in kind of its towers into Cellnex France. We are open to every typology of transaction. Okay? I would go to the concept of contribution of sharing in a commensurated way with our clients and always protecting our neutrality. Regarding less optimization, I think, Alex, as you mentioned.
Yes. So interestingly, the leases is one of the elements that are more variable when you look country by country. So you may be seeing some specific countries where the ground leasses are like three times the leasses in other countries for a very similar type of location. So that, of course, is making us to focus on the effort on where we could get the efficiencies more material. And this is where we are devoting our focus. There are also different regulatory and legal frameworks in relation to the leasses. And for instance, in the U.K., there is the Electronic Code that allows for telco operators, including Cellnex, to accelerate somehow the reduction of the leases with the landlords at the moment of the expiration of the contract. So this is not an immediate action that you can apply. It is alongside the maturity of the contracts.
Other type of elements that we are applying is working on anticipating some of the leases in order for having a reduction on the prices. So we do apply a set of tools that allow us to go with the best suited proposition for the landlords depending on the country and also depending on the type of rooftops or, as you can imagine, rural areas where the prices are also different. So it is an interesting science, the one that relates around the ground leases. And we are, in a way, seeding ourselves from country to country on the different techniques that we can apply on this type of negotiation.
Thank you. The next question comes from Luigi Minerva from HSBC. Please go ahead.
Yes, good afternoon, and thanks for taking my two questions. The first one is, well, on the point that you made that you are improving the risk profile, and one way of doing it is actually to have more blue chip operators as your customers. So I was wondering, how do you see the attitude of the big players in the market? So the likes of Orange or BT, has it changed over the years? Do you see them now more willing, more open to discuss value creation opportunities with you? And the second question is about Arqiva and the takeaways you may have from that experience. So what you did there, you did a carve-out of the telco business out of a more complex entity. And I was wondering whether what you have learned with Arqiva can be applied in other similar situations.
It's public news that in the past, you looked at TDF, and if I remember well, the issue was exactly the presence of the broadcasting assets, so I was wondering if you can tell us what you learned from Arqiva and whether it's useful for similar opportunities. Thank you.
In relation to the first question, what we can really tell you is that five years ago when we were born, there were tower discussions that by all means were not possible with some MNOs. Today, every MNO is willing to have a discussion around towers. So the situation has changed totally. Also, our own, let's say, life during these last five years has made a lot of the MNOs reflect on what is the value of the towers. And what we really can tell you is that there are a lot of talks in order to see how we can continuously improve bringing value to the different MNOs. But as of today, we are having an every MNO is open to have a discussion around towers. So they cannot afford not to have an equity story around the towers. Okay?
And probably it's because you are asking quite a lot to them about the towers as well. So in relation to Arqiva, it's possible to do it. And if Arqiva did it and the shareholders of Arqiva did it, why not others could be in a position to do it? So it's feasible. It takes some time to separate the carve-out of the different assets. It's not an easy task. But if they did it, others could do it. So maybe it's an inspiration source for others to maybe monetize part of the portfolio better than having everything together. Why not?
Okay. Thank you. And perhaps a quick follow-up. You mentioned in your remarks adjacent markets. And I was wondering whether currencies are important for you. So whether you would prefer exposure to hard currencies market or you would be willing to consider maybe more transition economies where the currency risk would be higher if you were to buy an asset there?
No, no. In terms of currency, please, hard currencies, maximum volatility. Sorry, visibility, lowest volatility. I mean, it's something that for us, this is key. And this is key because at the end of the day, we are a euro company, and we trade in euros, and we can be working long hours for nothing. And then you wake up in the morning, and you see that that weak coin is zero, and then it's nothing. So no, we like the Eurozone a lot. We like the Swiss francs a lot. We like the pound. And this is our proposition to you, to keep on investing on good currencies.
Okay. Great. Thank you.
Thank you, Luigi. We have time for one more question only, please.
Thank you. The next question comes from Giles Thorne from Jefferies. Please go ahead.
Thank you. Thank you for squeezing me in at the end here. Three questions, please. The first one is on the question of antitrust. I think most people were surprised to see both the Italian and the U.K. situations requiring a review and, in the case of Italy, some remedies. So the idea of deploying EUR11 billion of capital substantially within footprint is perhaps not as easy in 2020 or 2021 as it was five years ago. So I would just like to get your latest comments on how you see building scale within footprint from an antitrust risk perspective. And then the second two questions are related to Germany. First of all, the first one's very simple. Did you speak to Telefónica before they transferred those 10,000 rooftop sites into Telxius? Was there any conversation there?
And secondly, Germany is obviously the big tantalizing, exciting, missing piece of your jigsaw. And in many ways, it's been quite difficult to crack that nut because there were so many uncertainties around how the MNOs will roll out 5G in this critical market. But equally, a lot of those pieces are now falling into place, but at the same time, creating alliances with it, making it strategically perhaps more difficult for the MNOs to do things. So again, a very nuanced question, but what's your latest thinking here on how you crack the nut of Germany? Thank you.
Thank you, Alex. Maybe in competition, and I will let Tobías complement. I think we are having a different view. I mean, I remember that we started to significantly increase our footprint in France in relation to the Iliad transaction. We had a conversation with the French antitrust. The approval came earlier than we anticipated. So I would say quite a smooth interaction. Also, we got experience from the CMA in the U.K. in the context of the Iliad transaction, and I guess that Portugal again, I mean, with NOS, I mean, the deal is not closed yet because it is too early. We need to finalize the carve-out. We got experience from the Portuguese CMA.
And I would say that maybe looking at other opportunities, we saw recently the approval by the European Commission of the largest creation of the largest towerco in Italy, joint control between two mobile operators. So I guess that in terms of concentration, we are not seeing any headwinds. On your second question, we can confirm that that transaction was not competitive. We were not involved. And maybe Germany, I will let the team comment.
No, well, Germany is always a nice target, obviously, but nothing new. I mean, Germany, it's a huge country. It's a very attractive market, but there are a few opportunities in order to be in. So again, we are not in a hurry in order to buy just assets. We are not in a hurry just to incorporate new countries. First of all, again, our first priority today is to improve our market presence in the countries where we are today, and obviously, we are always proactively looking for new opportunities in order to enter in new markets. I think we have to keep going, to repeat on, and to insist on our existing strategy, and maybe at some time, we will find the opportunity to be in Germany, but again, I think we are delivering as expected. For us, one of the most important steps forward is today, U.K.
I mean, having Arqiva on board, it's a very strong platform for the organic growth, as we said since the very beginning of signing this opportunity. We have to integrate also those transactions executed in 2019, which is not negligible for the management. I think we are in very good shape. We are executing. We are delivering even in the middle of the Corona crisis , incorporating our second transaction in Portugal. So I think we are doing so many things in parallel. Germany, again, happy to be there, happy to find the opportunity. But so far, still just a target.
Thank you, and just to follow up, you mentioned the U.K. there. Clearly, brings the spotlight back onto CTIL and MBNL, as was previously asked on this call. And could you just confirm that Arqiva's largest customers, so the sites that you bought, the largest customer on those sites is MBNL and CTIL, therefore suggesting that the actual overlap of assets between the Arqiva sites and those two JV vehicles is actually pretty small, which in turn suggests that there shouldn't be any major antitrust impediment. Could you confirm that?
Yes, I think that's correct. So those are the main clients. MBNL, bigger probably in terms of number of sites. And EE as unilateral client as well besides MBNL. That would be the base of the clients at Arqiva. So you are right that the effort that both MBNL and CTIL did in terms of rationalizing the tower landscape for the last years has been extraordinary. And it has been a great job by the MNOs, the four of them, in order to decommission sites and rationalize all the tower footprint. And a portion of it was the one that we have now acquired with Arqiva. So in terms of overlaps, there are not that many as you rightly are pointing out, yes.
Great. Thank you.
Excellent. Then with this, we have reached the end of the session. And thank you so much for your time. And for any remaining questions, we will continue to be at your disposal. Thank you so much again. Bye-bye.