Morning, everyone. My name is Juan Gaitán, Director of Investor Relations at Cellnex, and I would like to thank you all for joining us today for our Q1 2020 results conference call. We appreciate that today is a bank holiday for many of you, so thank you so much for the extra effort. And we also hope that you and your families are well. We look forward to seeing you again in person very soon when things come back to normal. As always, I'm joined by our CEO, Tobías Martínez, our CFO, José Manuel Aisa, and our Business Deputy CEO, Àlex Mestre, who will lead today's session. Throughout our prepared remarks, we will refer to the presentation we published yesterday, and then we'll open the line for questions. Please note that this session will have a maximum duration of one hour. So now I'll hand over to Tobías Martínez.
Please, Tobias.
So thank you very much. Good morning, everyone, and thank you so much for your time today. I would like to start sharing with you the main highlights of the period which has been marked by our ability to adapt to a situation without precedent. Thanks to the early measures we implement at the beginning of the virus crisis, we have been able to guarantee 100% continuity of services in all of our countries. It has been key. We are currently operating with a maximum level of responsibility with regards to our clients, our suppliers, our employees, who continue to work normally and ensuring the continuity of our operations, and the society, as a whole, committing financial and technical resources for cooperation projects and trying to alleviate the short-term impact of the crisis.
Therefore, the numbers we are presenting today are only the consequence of our capacity to adapt to a new reality in a very short period of time. As for the numbers themselves, they show a consistent organic performance, our focus on efficiencies, and the contribution from our recently acquired assets. Revenues have increased around 50% compared to last year. Adjusted EBITDA has increased 64%, and our recurrent leverage free cash flow is robust 50%, with our contracted revenues reaching EUR 46 billion. Not only have we seen limited impact in our business, but we are actively engaging with our customers in order to assess the potential for more services. We are also reiterating our guidance. Please remember that it includes the contribution from Arqiva and the towers from NOS in Portugal, and as we approach the closing, we will update our outlook accordingly.
Since the COVID crisis started, we have been approached with questions around our ability to deliver in this situation, and I think that recent developments provide a clear answer. We have been able to execute our second step in Portugal just four months after entering the new market and signing the deal in the middle of the crisis. We are seeing that the mindset of customers and governments is evolving, and they are appreciating the strategic nature of telecom services more than ever. The majority of European countries are classifying telecom as an essential service, and we are also seeing a dramatic increase in the demand for data. And finally, I would also highlight that thanks to the homework we have been doing, today we have plenty of financial flexibility.
We have around EUR 6 billion of available liquidity, fully contracted, and we keep all the doors open in terms of potential sources of funding. So moving to slide number three, let me please reiterate our ability to adapt to this new situation. We have made sure that all of our network operation and control employees have the means to work from home, not having experienced one single disruption in any of the services we provide. The rest of our organization is also working from home, having adapted our IT systems to warrant 100% business continuity, with the exception of our field engineers, to whom I would like to thank their dedication and their commitment in these challenging times. Yesterday, it was our birthday. Our IPO took place five years ago, and it is thanks to this team that we have built the Cellnex UK today.
On slide number four, just a quick update on how our growth strategy translates into geographical presence and financial metrics. When all of our deals are closed and our build-to-suit programs complete, 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 profile. Our portfolio of sites will be around nine times bigger than the moment of our IPO, only five years ago. Around 85% of our revenues will be generated by telecom services, and around 85% of our EBITDA will be generated outside of Spain, and with this, I will now hand over to our CFO, José Manuel Aisa, who will provide more details on the period.
Thank you, Tobías. If we move to slide six, we are showing here our operational performance in the quarter.
As we have already mentioned, we have consistently generated organic growth across all of our geographies. Total PoPs have increased around 60%, including the contribution from organic growth and also from our recent acquisitions. If we focus on organic growth only, excluding any change of perimeter, PoPs have increased around 5% compared to last year as a result of the continued densification process that we are seeing across Europe. Finally, the DAS nodes grew at around 25%, and we expect to be more active in this area, pursuing a number of opportunities related to broadband connectivity for indoor coverage and transport networks. On slide seven, you can see a list of the commercial opportunities we are seeing assessing in order to secure future organic growth, both in terms of our traditional services but also new services in order to become a more relevant industrial partner for our clients.
In summary, Iliad continues to generate organic growth in Italy and France, and we believe we can continue expanding this successful industrial partnership. We are seeing demand for our services not only in established markets but also in more recent markets, with colocations requested by new tenants and discussions around potential densification solutions. We continue to execute in the area of indoor coverage and other densification solutions 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 anchor tenants and with the same tower economics and business model.
Moving to slide eight, you can see here the building blocks of our recurring leveraged free cash flow in the period. The positive impact from our organic growth, including efficiencies and the gradual deployment of sites associated with our build-to-suit programs, is significantly reinforced by the contribution from our recent deals. This is partially offset by cash elements below our Adjusted EBITDA, being the payment of leases linked to new portfolios the main contributor. Taking all these effects together, Cellnex has generated a strong recurring leveraged free cash flow growth of 50% year on year. Moving to slide nine, our revenues have increased 49%, our Adjusted EBITDA 64%, and our recurring leveraged free cash flow 50%, with our Adjusted EBITDA margin significantly increasing to 74% 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 ways. Payment of leases increased due to the larger footprint, maintenance capex expected to converge towards our guidance during the year, and interest paid reflects the terms of our debt structure and our available liquidity. Moving now to our balance sheet on slide 10, movements compared to December 2019 are mainly explained by our M&A activity in the quarter, increase in total assets and decrease in available cash as a result of our deals, and liabilities up due to the new instruments in the period.
Compared to December, our net debt increases again due to our M&A activity, but our strong liquidity position allowed us to face our committed investments and also continue pursuing the opportunities in our pipeline. Following up on this, you can see on slide 11 the details of our capital structure and our available liquidity position. Our debt has an average maturity of around six years, a cost of around 1.5%, and no refinancing is required before July 2022. It is important to highlight in the current context that we have a strong position of available liquidity at around EUR 6 billion, fully committed, that we will reach a backlog of EUR 46 billion when we close all of our transactions, and that our debt has no covenant, no pledge, no guarantee.
This unique combination allows us to maintain our financial flexibility even in these challenging environments and provides us with a wide array of options in order to continue financing all our growth, and 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 zero one on your telephone keypad. The first question comes from Andrew Lee from Goldman Sachs. Please go ahead.
Yeah. Good morning, everyone. I had a couple of questions, one on organic growth and secondly on the M&A pipeline. Firstly, on the organic growth outlook under this COVID environment, there was a slight slowdown on organic PoP growth in Q1. Does this mean we should extrapolate the small impact from COVID in March to a more extended and larger impact through Q2, and that the run rate of organic growth in Q2 will be meaningfully lower? Another way of asking that question is, what do you think the organic PoP growth rate will be in Q2? And then the second question was on the M&A pipeline. You stuck to the old pipeline numbers in the presentation. I wondered if you could give us a bit more color on the scale of opportunity going forward and what the mix is of the future M&A opportunity between towers and fiber backhaul.
Thank you.
Thank you, Andrew. Your first question, I would say that it's maybe too early to try and extrapolate what we've seen in March for the rest of the quarter. I guess that we have almost two full months, May and June, to make our conclusions. Also, bear in mind that we are coming from a very strong quarter, Q4 2019. Also, that in some cases, maybe the commercial activity is slower. Typically, we also see that during the summer months, for example. So I guess that, no, I think it's maybe too early to make conclusions on the rest of the organic performance during the year. So far, we haven't seen any change in underlying trends from our customers. Maybe back to.
About the structure of the pipeline remains the same, I mean, but we are seeing that, obviously, 5G is becoming more and more on the table. I mean, when we are approaching customers beyond this temporary impact of the corona crisis, customers are raising 5G projects. So I think this is very good information. This is a very good clue of they are looking at beyond this crisis because 5G, no doubt, is a strategic part of the future CapEx plan or outsourcing opportunities. So I think the trend is moving accordingly with this evolution of the technology typology and the requirements from the customers. So I think, in a nutshell, we could say that we are seeing strong activity, very, very strong activity on the telecom operator side.
Thank you.
Thank you. The next question comes from Simon Coles from Barclays. Please go ahead.
Morning, guys. Thanks for taking the question. I guess just to follow up on that M&A one, I saw in an interview to Barclays you talked about the portfolio potentially doubling over the next three years. So I'm just wondering, is that still macro towers, and is that you buying existing assets, or should we start to think about the pipeline moving more towards BTS opportunities or predominantly BTS opportunities, or will we start to see increasing deals around small cells or further fiber to the tower? And then secondly, probably a question for José Manuel. Previously, we've always expected deleveraging to happen at about 0.6 x EBITDA per year. Now we're entering a phase where you're spending quite a lot of expansion CapEx on the BTS programs that you've signed.
How should we sort of think about that deleveraging profile going forward if we assume no more M&A after Arqiva and the NOS deals? Is it purely going to come from EBITDA growth? Thank you.
Thank you, Simon. I will reply to your first question. Again, it's maybe the same question for. We are seeing that 5G is impacting on the requirements of the telecom operator. So this is a fact, not just for Cellnex. It's a fact for this industry. We are seeing that wireless infrastructure and the opportunity to outsource, it's becoming more and more a fact. I mean, after five years, because yesterday it was our fifth anniversary since the IPO, we are seeing that today, no doubt, no doubt, 100% of the players in Europe are looking at outsourcing as a strong tool in order to monetize and/or to create value. It doesn't matter. We are following the evolution of these players, and we are designing a tailor-made solution for everyone. I cannot tell you that, well, fiber to the tower, it's becoming more and more relevant. We'll see.
We'll see. But it's a fact that if you look at our recent agreement with Bouygues, fiber to the tower will be a must for 5G. It's a must. Same with densification. So densification will be a must. I mean, but it's a different type of densification. It's not just about towers. It's not just about rooftops. It's about the DAS. It's about small cells. So I think the evolution of the technology, it's accelerating also. It's creating new opportunities in different types of infrastructure. So this is the reason why we are seeing that if you look at our backlog, if we stop the sales process today, we are doubling the company at the end of 2022 since the figures you can look at the end of 2019.
But in our view, the M&A process will allow us also to double the size in the next coming three, four years from now. So this is not just about the capitalization of the contracts we already have in our backlog. It's about the opportunity to consolidate this positioning, to improve the efficiency, to improve the build-to-suit program. But build-to-suit will be also a part of this evolution of this growth because, again, densification will be a must as well. So densification, fiber to the tower. So we will find more and more opportunities in this regard. Simon, regarding your second question, you are right when you see that somehow in the next three years, as we develop our strong build-to-suit programs, it is true that the cash flows that we generate are devoted to these build-to-suit programs. So we are somehow self-sufficient or we can self-fund ourselves.
But at the same time, it is true that our net debt, if we deleverage profile, reduces a little bit. This is on one hand. On the other hand, we are improving significantly our business risk profile and our diversification in terms of clients and in terms of countries. So from a credit perspective, this has a neutral impact. Once these build-to-suit programs are somehow reduced, we will come back to the deleverage profile that we had initially. So yes, it's true. We are in the middle of an important process of investment. We are self-sufficient. So all the cash that we generate, we devote to build. We do not need any cash from outside. But it is true that our net debt in the next three, four years will somehow deleverage, but not at the same speed as before. After that period of time, we will come back.
The company generates cash flows, has good profiles of cash flows, and in the long term, this is a good strategy.
That's very clear. Thanks very much, guys.
Thank you. The next question comes from Roshan Ranjit from Deutsche Bank. Please go ahead.
Good morning. Thanks for the questions. Two for me, please. We saw a pickup in the lease liability this quarter as a result of the Iliad sites coming online and Omtel. Is it possible to get a sense of how we should think about this tracking through the year as the build-to-suit programs ramp up there? And secondly, a kind of, I guess, high-level question. In your discussions with the MNOs, what kind of commitments are they asking for from you? I guess my question is based on if I think back to beginning of last year, you came to the market and raised equity prior to announcing a deal. And then again, later in the year, you announced a deal at the same time as raising equity. So are we seeing the same kind of dynamics from MNOs?
Are they wanting kind of commitments or the ability to show funding, or are they a bit more relaxed now? Thank you.
Thank you, Roshan. Maybe I will take the first one. Basically, you shouldn't be expecting a major impact from incremental lease liabilities as a result of our build-to-suit program. I mean, of course, change the perimeter. The moment we close a significant-sized transaction in the balance sheet, you will see the impact of the lease liabilities associated with these towers that we are acquiring in day one. But also, it is true that we are making progress on our build-to-suit programs. In terms of number of new sites per year, it's maybe a few hundred. So you shouldn't be expecting a major impact in our balance sheet coming from this activity. And I will leave the second question for José Manuel.
No, listen, the commitments that we are doing, we are obtaining from our partners also come from a discussion with them.
What we do are deals from scratch, which means that we sit down together and we understand each other's needs. Obviously, from that discussion, we obtain a commitment. On our side, it's very important to be commensurate with our rating in the long term with our cash flow generation, as we were saying before to Simon. Obviously, on the other hand, the deployments of the clients do not have to be executed from one day to the other. This takes time. This is about industrial development. I think that sitting down together, we can find ways of collaboration which are somehow sensitive to their industrial needs and also to our industrial capacities and funding possibilities.
When we come to you to ask for equity, as you were saying last year, what we try to do is to obtain the highest visibility in our pipeline and also from our discussions, and this is the good part of Cellnex. We work from scratch from an industrial perspective, and we try to reach win-win agreements.
Okay. That's very helpful. Thank you.
Thank you. The next question comes from Ottavio Adorisio from Société Générale. Please go ahead.
Hi. Good morning, gentlemen. I have a question on my side. It's difficult to comment on future deals. We want actually to go back to a deal you recently announced, the NOS one. You announced two deals this year in Portugal, and two pretty sizable. So I believe there are significant overlaps in the towers between the two infrastructure you bought. I guess you also had the opportunity to do some due diligence on these two deals. My question is, what's the overlapping between the two infrastructures? Which kind of synergies you can extract? And also, how difficult is it to move custom equipment from one tower to another to extract these synergies? And this question is actually tied up with a deal that it looks that publicly you're looking at the moment is in Ireland. Of course, you cannot comment on future deals.
But because that would for sure overlap with another deal you did a year ago with Cignal. Again, the question is, how easy is it to move equipment? How's the contract structure with the clients whenever you buy the towers? Do you have full flexibility, or do you have to ask for their permission? Thanks.
Thank you, Ottavio. This is Àlex Mestre. So yes, in relation to second deals in a country where we already have a previous anchor client, this is an element that we always try to factorize as much as we can on the contracts on ensuring the capacity to move equipment in the event that that makes sense. Okay? So the ability to do that, this is the so-called commissioning, as we've been doing already up to a certain point in the past, is an element that we want to have a certain degree of liberty to drive that in the relationship with the clients. When we look at the case in Portugal, there is a certain portion of it. However, this is linked to two trends happening at the same time.
One is the 5G densification, which may be requiring sites that, in principle, potentially could be with lower frequencies decommissionable. However, when you look at 3.5 gigahertz, that you know the radiation distances are shorter, maybe it's not that obvious. This is one point, and the second one also happening in parallel in that case, particularly with NOS, to whom we acquired the second portfolio, there is an announced RAN sharing agreement with another player in the market that is yet to be crystallized. It's yet to be formalized also on their side, and this is potentially not allowing to have a clear vision on how this decommissioning could be done in the future. Okay? Bear in mind those two elements running in parallel. You mentioned about Ireland. Our first acquisition in Ireland was not an acquisition that we did directly with one MNO.
It was with TowerCo that was not having an anchor. So this means the overlap here we need to pay attention. In fact, Eir is a good client of our first portfolio, which means that the potential decommissioning is less obvious because that efficiency has already been done previously. Being as Cellnex Ireland, as of today, a company which is already hosting Eir in an important proportion of our sites.
Thank you. The next question comes from Giles Thorne from Jefferies. Please go ahead.
Thank you. My first question was on France and Bouygues. I was very surprised to see Bouygues choose to work with Phoenix Tower for a very large build-to-suit program. So if you could give us some color as to why you aren't doing that work for them? Second question was, yes, back on Portugal, and Alex has hinted at part of the answer, but NOS and Vodafone are obviously negotiating their network sharing. Can you confirm whether you will or won't be part of that overall agreement? So if you are, presumably, you will be asked to do some type of upgrade CapEx to the sites in preparation for 5G, maybe fiber, and maybe you'll be allowing RAN sharing on your sites as well. And the reason I feel justified in asking this is because you've included an expansion CapEx in your guidance for that deal.
So it feels like you will be part of that solution, but if you could just confirm. And then Germany. In interview, you've expressed what I would interpret as a little bit of frustration around Germany and how, and I don't mean to put words in your mouth, but I will, how Deutsche Telekom is perhaps being a bit slow in making a decision around a partnership. Why not just force their hand by participating or looking at the Telefónica Deutschland deal that's ongoing at the moment? That was it. Thank you.
Thank you, guys. Maybe Àlex will answer the first two. Maybe Tobías, the last one on Germany.
Yes. Simple deals. In relation to France and the build-to-suit program on rural areas that we are not participating, it can be understood that on the strategy relationship that we have with Bouygues is very much devoted to dense areas. If you look at all the portfolio, all the different projects that we are having with them in terms of central offices, metropolitan offices, and tower deployment, and tower acquisition, it's basically on the dense areas. So it is our understanding that what really Bouygues wants to have is foster a strong partnership with someone, only one, partner on the dense areas. Then on rural areas, those have been competitive processes. Of course, we participated, but probably someone made a better offer, and this is the way it went ahead.
So we are fine with it. Moving to Portugal, yes, as we mentioned before, there is this announced agreement not yet crystallized. And of course, we have given all the flexibility to our new partner in Portugal to handle that in the best way they need. So we've been always of the opinion that having active sharing agreements does not necessarily mean that you need to do a passive sharing agreement. This is a way to do it, and operators can join forces on the active and on the passive. But then on the passive part, they are both more bound than one to each other on the final decisions. So technically, it's completely possible to do monetization, carve-outs, and not sharing into the single entity the passive equipments, however, still doing the active equipment agreements.
This is an element which we believe gives the highest degree of flexibility for everyone, and this is how we have been endorsing and supporting our partner in Portugal in order for them to have full degree of flexibility on how to rearrange finally the RAN sharing. In this RAN sharing, there will be RAN sharing assets on the top of our new towers. There will be sites potentially that may survive the RAN sharing efficiency agreement. So that will bring a potential opportunity in the future. Let's see. But now, let's say NOS has full flexibility to have their discussions with Vodafone, and we are happy to be supportive to that.
Wow. Okay.
Then about Germany. Germany, as a market, as a country, obviously, I think it's a target for everyone. I mean, not just for Cellnex. But there are just a few opportunities.
You know that we have a very good and fluent relationship with Deutsche Telekom, but we are executing our strategy. We are interacting with them. We are always in conversations, but it doesn't mean that currently we are discussing any specific opportunity. I think we have to keep going. I mean, but we are not feeling this situation as a frustration. I mean, it's obviously an opportunity, and sometimes wishes could be stronger than the reality. Again, no complaints at all. We are very passionate in order to find the right opportunity in every country, in every market. It's not a frustration. It's not at all. We are very happy up to today, but obviously, we don't want to renounce in order to find the right opportunity to be in Germany, obviously. Thank you very much.
Thank you. The next question comes from Jakob Bluestone from Credit Suisse. Please go ahead.
Hi. Good morning. Thanks for taking the question. I have one question, please. I'd just be interested in hearing your sort of perspectives on the fact that a number of operators have suggested that they might slow CapEx a bit in the sort of current environment in order to protect cash flow in the near term. Obviously, there's a lot of things in CapEx, and perhaps some of the issues are more related to fixed line and some of the difficulties of deploying fiber. But I'd just be interested to hear from your point of view and your discussions with the operators. Are you seeing any sort of signs of perhaps they're taking their foot off the pedal a little bit and trying to go a little bit slower on some of their deployments?
This sort of whether there's any shift in their desire to pursue build-to-suit at quite the same pace. Just sort of curious about your thoughts around those comments we've had from the operators. Thank you.
Can you please repeat the last part of the question? Sorry.
Yeah. I mean, my question is really just some of the operators have suggested that CapEx might undershoot this year in particular because of the current macro backdrop. And so I was just wondering, does that have any implication for you guys in terms of their desire to roll out 5G, for example, at quite the speed that we perhaps were originally hoping?
We cannot comment on CapEx plans from our clients, logically. But if that would be the case, we see that as a potential opportunity because the needs for deployment still exist, whatever it is, because regulatory obligations as a result of the commitments on the spectrum concessions, or because, as we have been all of us enjoying or suffering, the massive need of networks to be deployed during this current situation. So the need is there. Why is this an opportunity? Because it allows us for a potential organic growth capabilities, or even, why not, us deploying CapEx on behalf of our clients. And we are already used to that. We have several projects which are CapEx projects than actual M&A projects. So it's part of our value proposition to the clients today. So happy to continue, let's say, boosting this business case.
Thank you.
Thank you. The next question comes from James Ratzer from New Street Research. Please go ahead.
Yes. Thank you very much indeed. Good morning, everyone. Two questions, please. Just, I'm interested in your thoughts on the announcement earlier this week about the formation of a larger Open RAN alliance between a number of vendors and operators. I mean, do you think that has any implications on your business going forward? Be interested to hear your thoughts on that. And then secondly, specifically in Spain, I'd just be interested in hearing what you're seeing from Vodafone and Orange as they execute their own tower and RAN sharing deal. Is that likely to have any impact at all on your level of tenants during 2020 in the Spanish market? Thank you.
Okay. So in relation to the Open RAN, we monitor that quite closely. Actually, we're active in several associations like TIP from Facebook and others where we are envisaging the virtualization of the radio networks. So we believe that this is an interesting opportunity that will help to reshape a little bit all the vendors' ecosystem, bringing more players into the market of radio access networks. So it is interesting because it's shaking the industry, and it is a good element, and we are closely monitoring all those initiatives from a standardization standpoint. In relation to the second question, I understand that you are referring to the Vodafone and Orange RAN sharing agreement in Spain, particularly?
Yes. Correct. Yeah. Whether that's actually they've talked about, I suppose, trying to reduce their tenancy count in Spain, but I was actually trying to kind of work out if that is really starting to kind of come through on your business at all, or if that actually ends up getting pushed out for some time.
No. This is something which is not being affected for us, especially because, for instance, the last acquisitions that we've been doing on Orange sites, those are post-efficiency of the RAN sharing agreements that they have with Vodafone. So no one of those sites is part of the potential decommissioning in the way that they have geographically split Spain into areas: one, Orange, and one, Vodafone. So this is very much in line on my comment before that we really envisage the way to monetize infrastructure, to carve-out infrastructure by the operators, but still having very strong bindingness on the RAN sharing part, which is the case of Spain. And again, happy to support our clients on their efficiencies too.
Great. Thank you.
Thank you. The next question comes from Sam McHugh from Exane . Please go ahead.
Yeah. Good morning, guys. A couple of questions quickly. Just firstly, what proportion of your sites today are owned versus leased? And I just wondered if you saw any opportunity, given the current macro environment, to opportunistically prepay rents or acquire more land. And just related to that, how much non-BTS expansion CapEx would you be comfortable spending? And then secondly, you now own a lot more towers than you did a year ago. Just wondered if anything had surprised you now that you've taken ownership of some of these sites and whether your approach to M&A has changed, given your experiences in those last 12 months. So kind of a bit of a big-picture question. Thanks very much.
Thank you, Sam. I would say that on your first question, you can assume that maybe 90% of our sites are on land that we basically lease, and then the remaining 10% we own this land. It is true with maybe an enhanced strategic nature of our site. We are proactively assessing the potential to acquire land. I mean, of course, that needs to make sense financially. Also, that should be linked to the, I would say, the specific strategic nature of that site. So we need to be careful about committing to that plot of land in the very, very long term. So yeah, I would say that we are more open to consider either land acquisition or maybe very long-term rights of use.
On the second question, maybe let me please rephrase for the team because I'm not sure that we've got that, which is if we have seen different dynamics in the way we approach M&A now, what we have learned from our experience in the past, having done many deals now.
Because COVID or no?
No, it's correct, Sam.
Yeah. Exactly. Whether you've obviously been negotiating tons of deals. I wondered if your kind of view about how you do deals, how you structure deals, anything that you've learned maybe in the last 12 months.
I'm happy, José Manuel, also since you are the head of M&A, but we are continuously learning. There are mechanisms that were not applicable two years ago and now are applied not only from our side, but also in many other M&A deals that we are not even having present. We have enriched quite a lot the different elements that we can offer in our value proposition to our partners in all senses: in the operational, in the financial, in the build-to-suit schemes, on the asset classes in order to tailor deals which are tower-like 100% in any case, irrespectively if it's a fiber to the tower or it's a tower itself. There is a learning process, yes, on that. I'm sure we can continue learning, but after the amount of deals, we are quite savvy already on that. José Manuel.
I would say to you that the key point is not to change the business model. This is the key point. So at the end of the day, all the asset class must have exactly the same M&A dynamics in terms of revenue growth, OpEx, in terms of CapEx maintenance, in terms of expansion CapEx. So everything, if you print out an Excel sheet of a tower deal and a fiber to the tower, and you print both P&Ls and cash flows, and you hide the name, it must be very difficult for anyone to know who is who. So this is key for us. This is to retain the business model, the cash flows, visibility, the organic growth in the future that has given us the opportunity to create value in these last five years.
Great. Thanks very much.
Thank you. The next question comes from Luigi Minerva from HSBC. Please go ahead.
Yes. Good morning. Thanks for taking my three questions. The first one is for Tobías. Just going back to your interview a month ago on the Spanish press, you mentioned about integrations of assets, and that's not always straightforward given the numbers you've executed. So I just wanted to ask you to what extent the effort required in integrating all the various assets you have acquired recently actually becomes predominant on your ability to acquire new ones. And the second question is related to the fiber to the towers opportunity. Are you able to give us maybe a three-year view on the size of the opportunity and in which market it is more important? I presume it is in the markets where you cooperate with smaller players rather than the larger ones.
And then maybe finally on the competition to acquire new assets, if we enter a recession, quite a severe recession as expected, do you see infrastructure funds, private equity to become less competitive in public tenders? And so what do you see the valuation of the assets going in terms of the ones that will come from public tenders? Thank you.
Thank you. I will reply to the first question. Integration obviously is a must. I mean, we are not an infra fund. We are not private equity. We are an industrial group. It means that we have an industrial model. One of the things that we are perceiving, these lessons learned on the corona crisis, positive perception is from customers. Customers are realizing that in this current situation, companies like Cellnex with a strong industrial structure and track record, reliability in our services are a must. I mean, providing 100% of continuity since the very beginning has been an outstanding value proposition, but by facts, I mean, not just the pure nice words, and this is the reason why we are paying a lot of attention to integration, and you are right. It's an effort.
Sometimes it's challenging to manage in parallel integration with the M&A opportunities and therefore the speed of the growth. So this is true. When we find the right opportunity to create value, to integrate companies, to improve our presence in new countries, we go for it. Obviously, sometimes we cannot reach an agreement, but we try. And I think we have a very high success ratio. But you're underlining one of the most important topics on the day-to-day. This is about integration. And again, this is the reason why we have a specific structure led by the deputy CEO and COO. We have a specific structure devoted to ensure that we are integrating people, processes, setting our own industrial model, combining a common culture, but obviously respecting the country-by-country culture, but integrating, integrating, integrating because it's about a group. We are an industrial group.
This is, well, it's time-consuming. It's an effort in terms of managing the growth. As you can see in the figures, we are showing you that we are consolidating our M&A acquisition in 2019, but in a very good shape. I mean, delivering reliability even in the current situation on the corona crisis. We are receiving a lot of congratulations, a lot of good feedback from our customers. Thanks, Cellnex, to be there. Thanks to help in these difficult situations. As you can imagine, we are not making noise, but we are supporting strongly the operations in every country because now is the right time, is the right opportunity to show what that partnering means for Cellnex.
On your second question, Luigi, I think that fiber to the tower is an opportunity that makes sense where we already have a presence. So I would say existing countries and when we already have an anchor tenant. If on top of that, that anchor tenant also has the need to invest in fiber backhaul, that is something that for obvious reasons and because of the same economics as towers, that is something that we can do for them. In any case, as you can imagine, the proportion of these opportunities compared to our core strategy, which is towers, is limited. So the vast majority of the opportunities that we are pursuing today is based on macro sites. On your last question, I would say competition dynamics have not changed. I mean, this is an area that has attracted interest for many years.
Many different players, different profiles are willing to have a presence, but I guess that, well, we have quite a unique combination in the profile. Partners are comfortable dealing with us, and that's why we do believe that we continue to be in a good position to continue growing in Europe.
Okay. Thank you.
Thanks. The next question comes from Emmet Kelly from Morgan Stanley. Please go ahead.
Yes. Good morning, everybody. This is Emmet at Morgan Stanley. I just had one question, please. I know it's about four months, maybe five months since you started integrating the Iliad and the Salt Towers. So I think you've brought on, I think you said 1,800 towers in Italy, about 5,500 in France, and just over 2,500 in Switzerland. Can you maybe just give us some early indicators of any success you're having at upselling secondary tenancies on these towers, maybe indications of interest that you're getting from other telcos to lease space in the towers? I'm conscious it's still very, very early days, yes, and we've also had the COVID crisis in the middle, but any kind of flavor of raising the secondary tenancies on those towers, please. Thank you.
Thank you, Emmet. Yes, as you well said, we are in early stages. The beauty of those three projects is that we have already a previous anchor in each one of those geographies. So this allows us to facilitate the discussion among the players so we can very quickly identify synergies in the middle of a 5G deployment. And again, this is something that it creates, let's say, an additional element for the CTOs to take into consideration whether the decommissions are possible or not. So in front of that, there is more a prudent element before the decommissioning aside, well, let's think twice because I may be needing it for 5G. But there are initial talks, positive, difficult to give you as of now any indication on the potential absolute figures of uptakes as of now.
Thank you very much. The last question comes from Stefano Gamberini from Equita SIM. Please go ahead.
Good morning, everybody, and thanks for taking my questions. If I may, the first regarding electromagnetic pollution, you said that the demand of new investments from MNOs for the development of 5G is growing a lot. On the other side, it seems that also from local communities, the concerns about 5G pollution are growing. So do you see some risk there? What is the main obstacles to accelerate these investments that could arise from this perception from local communities more than from governments or EU? The second regarding P&L figures, you counted EUR 18 million one-off in the first quarter. Do you think that there are some other one-offs during the years related to the crisis probably and so on? At the same time as regarding cash one-offs, if I'm not wrong, in the first quarter, we're around EUR 85 million .
Could we expect something also in the rest of the year? The last question regarding the cash tax rate. I noticed it was zero in the first quarter, but when you go ahead with a new acquisition and you calculate your relevant free cash flow targets, what is the average cash tax rate that you applied? If I'm not wrong, in the last acquisition in Portugal, this was close to a normalized level, while historically it was lower thanks to the tax shield from goodwill depreciation and so on. Many thanks.
Thank you, Stefano. Let me maybe start with the second one. The answer is yes. I mean, there are a number of elements that, because we don't think that are directly attached to our business, we are classifying as non-recurrent. So for example, given our growth, we are booking the M&A expenses and that constitutes the bulk of this line. But yeah, I would say that, of course, that will very much depend on our M&A activity during the year, but you can foresee a similar performance during the rest of the year. On the third one.
Yeah, no, on the tax, and you know that since the beginning, Cellnex has been very focused on structuring a tax scheme that is, first of all, fully compliant with the law, and secondly, that helps us to optimize the tax cash tax. So when you raise this topic, let me give you what we have done so far. So far, since 2015, the last five years, our cash tax over total revenues have gone from 2% to almost 4% depending on the year of total revenues. There has been some years in which the tax bill has reduced a little bit, has been increased a little bit, but this seems to be this is to me what we have done so far. What can happen in the future, it will depend on how we structure the deals of M&A. You were suggesting the idea.
It is true that for Cellnex, we do have M&A golden rules, and these M&A golden rules are fully focused on the cash flow that we generate. It is obvious that we do prefer those transactions in which we acquire assets to those transactions in which we do acquire shares because of that reason. Assets are fully tax deductible in the next years. We will continue doing so. I think that when we run our models, we continue projecting what we have done in the past, so the same tax strategy, and I think that's a very, very competitive tax structure compared to our peers, even though our peers are real estate transfer tax companies, real estate companies. I think we can be very competitive in the next quarters also, very competitive.
In relation to the first one, Stefano, well, needless to say that there is no physical evidence that this radiation is causing any harm to the health. But well, we are nowadays, let's say, health-sensitive, and this is normal. The reality is that these electromagnetic emissions are normally measured through the distance from the emitting point. So clearly, there is a difference in that sense from a rooftop to a tower. So towers are, by definition, farther from the areas where the people may be living. And there is clearly a different way to measure from a tower to a rooftop. Clearly, on the towers, there is no impact on this because precisely the way it is measured. On the rooftops, people are closer. However, physically wise, a rooftop is not able to hold the same amount of antennas as a tower.
So as of now, we do not see any change on our projected tenancy ratios as we've been doing or colocation abilities that we've been considering up to now because that more sensitive element may be coming on the social landscape.
Quick follow-up, if I may. Are you experiencing that from MNOs? The installation of small cells could improve the situation or not?
Yes, it's a measure that we are discussing, but MNOs, as has been mentioned previously in other occasions, they want to squeeze the macro as much as they can. So meanwhile, the macro can colocate elements. That is what is going to be used. You will identify that small cells is a mitigant of that. So you can put, let's say, 10 small cells over urban furniture, which is an area where we are also, as you know, looking to be prepared when the time is ready to substitute a macro or a part of a macro because the lower frequencies always have to remain in the macro. Okay? So you could do small cells at 2.6 gigahertz or 3.5 gigahertz, but not below.
However, we have not yet seen that for the reason you are mentioning, the densification through small cells has been triggered because of emission radiation limitations.
Many thanks.
Thank you very much. There are no further questions. Ladies and gentlemen, this concludes today's webcast call. Thank you for your participation.