Infrastrutture Wireless Italiane SpA Q3 2021 Earnings Call (Italian) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Roshan Ranjit - Deutsche Bank - Analyst : I've got two, please. Firstly, just on the KPI, I think where you did drag into this material slowdown, 50 sites added in the quarter. Can you just run through the reason for that quite big slowdown? And you previously said you expect 400 sites by the end of the year. Is that still the case? Or this acceleration you're talking about quite a material acceleration on the sites for Q4? And then does that drive the -- you previously talked about this cruising altitude for tenants. Does that get us back up to the 1,200 tenants for Q4 as well? And lastly, the second question, just so I understand the acceleration in 2022. You talked about the OLOs improving pipeline on FWA and MNOs and better scenarios. So are you saying that in your FY2022 at the moment, you're not including a resolution of the Iliad situation, and if that is resolved, we see upside to the growth? If you could just provide some detail there.

Question: Roshan Ranjit - Deutsche Bank - Analyst : So the first part, great. On the 2022, so you are saying MNO is stable so, that isn't factoring in a resolution of Iliad. Is that right?

Question: Andrew Lee - Goldman Sachs - Analyst : Just had a question on cash usage. Obviously the revenue growth is accelerating. And as you laid it out in your e-mail, it is bringing your net debt to EBITDAaL faster down than consensus is expecting. And so you people are trying to work out where you spend your money, and you've obviously kept flexibility for now between M&A and shareholder returns. Just wondering if you could give an update on where you stand on M&A. Do you have anything in your sights that's of genuine interest? And any kind of guidance you could give us as to where that billion plus is going to be spent more of between shareholder returns and acquisitions we'll be really helpful.

Question: Simon Coles - Barclays Investment Bank - Analyst : I just wanted to dive into the comment around 2/3 of the revenue growth next year is committed. And per your answer earlier, it sounds like some of that is just assuming that other tenants so other MNOs or FWAs continue at the same rate as this year. If we were to exclude those, should we think that basically half of the revenue growth expected next year is already committed? Is that the right sort of math to be thinking about? Just trying to get a better grip on what you're trying to communicate with that comment.

Question: Simon Coles - Barclays Investment Bank - Analyst : And then just one quickly on working capital. I think you said -- there were some comments I didn't quite catch, but it's been neutral so far this year, should we expect it neutral for the full year? Just trying to check there's no funnies in free cash flow in the fourth quarter.

Question: Sam McHugh - Exane SA - Analyst : Two questions, if I can. Firstly on MSA commitments. I think in the slides, it says that the commitments in 2022 are greater than 2021. I just wanted to clarify exactly what that meant. Do you mean incremental revenue commitments next year are greater than those in 2021? Or you are just talking about the carryover that you just mentioned, the extra revenues? Then secondly, on the new services I want to see a huge acceleration, is there any benefit from the Vodafone assets already? Or is that three times step up all organic?

Question: Fabio Pavan - Mediobanca - Analyst : The first one is on your recovery plan. Was wondering if you're starting having some visibility on the projects in the pipeline on the timing on how you as a company will be eventually involved in this plan? And the second one is on the remedies. I guess we appreciated you continue to feel extremely confident then -- on the fact that an agreement will be found. Was just wondering if you have some visibility on the timing and eventually, what could be the next step that we should bear in mind?

Question: Georgios Ierodiaconou - Citi - Analyst : Just a couple of clarifications, please. I appreciate you already made a lot of comments about the 2022 guidance and how much of it is contracted. Could you just give us an idea about the inflation aspect of it? We're close to the end of the year. Can you perhaps give us an indication of what kind of inflation assumption you are putting in there versus what you have last year, if that's something you can share? My second question is around the use of proceeds and also other opportunities to grow. And I was wondering whether you are at all considering either in early or perhaps a bit more advanced stages of thinking of how you could expand the services you provide for your anchor tenants, perhaps even take control of some of the radio equipment that they share. Is that something you are considering? Have there been any discussions on this or something for the midterm?

Question: Georgios Ierodiaconou - Citi - Analyst : If I could ask a follow-up to my first question. Do you have your own indication of what inflation you already expect will be used for next year based on where we are today, and also give us all of this last year, changes for us to get bigger understanding of what's the tailwinds here. Is it 0.5%, is it 1%, is it more than 1%? Just to get a bit of a feel.

Question: Georgios Ierodiaconou - Citi - Analyst : Yes. Whether you can be a bit more precise as to what other expectations we should have based on the fact that in less than two months, the year would be over versus what you used in 2021, just to get an idea of what is the step-up we may see in 2022 versus 2021?

Question: Georgios Ierodiaconou - Citi - Analyst : Yes, only for inflation, whether the inflation we see in 2021 go into 2022 contracts. Is it 1% differential?

Question: Stefano Gamberini - Equita SIM SpA - Analyst : A few questions from my side. The first regarding this trend of -- the 2022 revenues which is two-third already committed. What is the reference of this growth? Are you referring to the consensus, which is around 9% or [855 million US] revenues in 2022? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2021 / 5:30PM, INWT.MI - Q3 2021 Infrastrutture Wireless Italiane SpA Earnings Call (Italian) So the second topic is if this figure is correct, this means that you still needed 20 million, 25 million viewers to reach 2022 consensus revenue, so how you can get it? What I mean is considering the six-month period in order to -- between the collection and the revenues, what is the trend in new collection that you expect next year to reach this target? And the second question regarding the 2023 targets. You confirmed also in this case these targets, which means a further 9% growth in revenues. What are the main drivers that you see in 2023 considering the delays in MNO's new collection during 2021, considering also the low visibility on small cells from 2023? So what are the main drivers in your view for getting this target of growth in 2023?

Question: Stefano Gamberini - Equita SIM SpA - Analyst : Just a quick clarification on these. You said the remedies are the second important novelty that we are waiting for. So in order to be more confident on 2022 revenue target, when we could expect an acceleration on remedies? End of this year, beginning of next year?

Question: Abhilash Mohapatra - Berenberg Bank - Analyst : I just wanted to go back to your point around Fixed Wireless Access please. In the presentation, you called out -- specifically called out visibility on the commercial pipeline, and you also sort of mentioned releases from some of the operators in the market. I was just wondering if you could give us a bit more color here (technical difficulty). So if you can give us some additional color here of what you are seeing in terms of demand, some of the clients, that could be quite helpful.

Question: Luigi Minerva - HSBC Bank - Analyst : The first one is on the slowdown in the new PoPs from the anchor tenants in Q3. Can you just go back and give us more details on the reasons why they've slowed down and whether we should expect the same in Q4 and what can trigger a change? Secondly, on the remedies, I'm just wondering under what circumstances can the European Commission eventually intervene and impose a solution, and also how -- whether there is a kind of ultimate date where eventually they have to intervene and impose a solution. And lastly, a more general question, I was wondering what are you observing from your customers in terms of their approach to Open RAN in the Italian market? And perhaps if you can comment on how do you think Open RAN can affect your business model? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 04, 2021 / 5:30PM, INWT.MI - Q3 2021 Infrastrutture Wireless Italiane SpA Earnings Call (Italian)

Question: Giorgio Tavolini - Intermonte - Analyst : I was wondering if you could provide any update on the electronic limit revision in Italy since this topic seems completely disappeared from the political agenda. The second one, a follow-up on the remedies. You said this is a matter more than when -- of when than an if. But assuming a worst case scenario or in addition to the remedies, would be an opportunity for you to enter a build-to-suit program with Iliad in order to support, accommodate their demand. And the third question is on the tax scheme. Diego was mentioning the new budget law, the draft budget law for 2022. I didn't understand completely if you expect to pay higher substitute tax on the second scheme in order to keep the same tax benefit. So what are the main changes to the second scheme?

Question: Giorgio Tavolini - Intermonte - Analyst : If you have the opportunity to enter a build-to-suit program with Iliad externally. I mean not completely related to the remedies, but an opportunity to speed up their demand.

Question: Ben Rickett - New Street Research - Analyst : Just wondering what we should expect in terms of updated guidance at the Capital Markets Day. Will you just be giving 2022 guidance? Or can we expect you also to update your midterm guidance? Looking further out would be helpful.