Cellnex completes its shift with the change of chief executive ahead of schedule

Cellnex completes its shift with the change of chief executive ahead of schedule

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The CEO of Cellnex, Tobías Martínez, announced yesterday, unexpectedly, his resignation from the position, causing a shock to the telecommunications sector. The executive leaves the company early, since his contract expired at the end of 2024. Over the past eight years, the manager has led a group that has become the main telecommunications infrastructure company in Europe, after executing a strategy of acquisitions that has involved an investment of 40,000 million euros since 2015, to reach a total park of more than 104,000 sites, at the end of October, spread over 12 countries.

The departure comes a few weeks after Cellnex’s decision to end its aggressive acquisition policy to focus on an organic growth strategy.

In parallel with the announcement of the resignation, the company indicated that its board of directors has already implemented the necessary mechanisms for the succession of Tobías Martínez. The management body has eight independent members out of a total of 11, with representatives of seven nationalities, with extensive experience in telecommunications. The other three directors are Martínez himself, and the two proprietary ones; the representative of Edizione, the holding company of the Benetton family, the first shareholder with 8.5% of the capital; and that of GIC, Singapore’s sovereign wealth fund, which owns 7%.

In the coming months, the directors will evaluate, with the assistance of a head hunter, potential candidates, both internal and external. According to industry sources, Àlex Mestre, current deputy CEO of Cellnex, will be one of the candidates to replace Tobías Martínez.

The company considers that there is sufficient time for an orderly replacement of the current CEO, who will be in office until the group’s next general meeting of shareholders, which is scheduled for June 1, 2023.

The truth is that the departure of Tobías Martínez has caused a wide commotion in the sector. For Goldman Sachs, for example, surprise is “negative.” Other industry sources believe that resigning now is not the best way to convince the market of the current strategy. The share fell 2.45% yesterday, to 31.8 euros, ranking as the second worst value on the Ibex.

The group suffered a strong penalty in 2022, with a 39% drop in share price, yes, in line with other companies in the sector such as American Tower, Crown Castle and SBA Communications. Some of the company’s large shareholders would not have liked this stock market performance, as was the fact that Cellnex was left out of the transactions for the sale of Deutsche Telekom and Vodafone towers, in which the investment funds emerged victorious. With this resolution, in addition, Cellnex was left out of Germany, the largest European market.

The manager, in any case, defended his career. In a letter, he stated that the resignation is a very thoughtful decision in which various factors, professional and personal, come together, which in some way define what a new cycle in the life of Cellnex is, “and which lead me to the conviction about the need for it to be led by a person with a time horizon that goes beyond December 2024, the moment my contract ended”, said Martínez, who added that “I am only anticipating a transition process for a few months natural that it was already, by itself, close”. Martínez, who is going to turn 64, recalled that they have been promoting and leading the projects of Tradia, Retevision, Abertis Telecom for more than 23 years and these last eight founding years of Cellnex. “Years of commitment to the telecommunications sector, accompanying our clients in their infrastructure development projects and facilitating their network deployments. Building a business project with its own identity and European scope, with a defined purpose of contributing to progress and the activation of opportunities through digitization and connectivity offered by telecommunications infrastructures”, stated Martínez, who highlighted the reputation and role that Cellnex plays in European telecommunications.

new stage

Cellnex is now facing a moment of importance, with a renewed stage and a new CEO. The company, once the aforementioned processes for the sale of the Deutsche Telekom and Vodafone towers were closed, during the past year, chose to take a strategic turn. As there are no “transformational” operations on the table, at least in a period of three or four years, when these funds seek to exit these businesses and maximize their investment, Cellnex decided to focus on organic growth.

In the presentation of the third quarter results, Cellnex indicated that it was opening a new chapter to adapt its capital structure, with objectives such as boosting cash generation and debt reduction, in a period in which interest rates they are on the rise The three priorities are consolidating the investment grade rating with S&P, driving organic growth and maximizing shareholder value.

Among other businesses, Cellnex highlighted the projects green field, with returns between 6% and 8%, the exploitation of new businesses adjacent to the towers, in the so-called augmented tower, the progress in the business of active networks (which is already operating in Poland), the connection of the towers with fiber and data centers. In addition, it has plans to densify networks in rural areas, transport infrastructure and security services; and private networks for the world of industry. At last year’s shareholders’ meeting, Tobías Martínez himself devoted a good part of his speech to explaining these new projects.

Cellnex, which has a portfolio of contracts with operators of 110,000 million euros, highlighted its “solid organic growth” in the first nine months of the year, with an increase in the points of presence in the locations of 5.7%.

The company also confirmed its forecasts for 2022 and 2025. In that year it forecasts revenues between 4,100 and 4,300 million euros, with an annual growth rate of 13%; ebitda, between 3,300 and 3,500 million, and the leveraged recurring free cash flow between 2,000 and 2,200 million, with an annual growth of 21%. “It is a very predictable company in its accounts,” say market sources.

Among other milestones, the group will begin to generate positive free cash flow from 2024, with the aim of exceeding 2,500 million euros in 2032. Between 2023 and 2024, Cellnex will face strong investment commitments in the deployment of new sites, included in contracts with telecommunications companies, largely linked to 5G.

This strong cash generation will contribute to a rapid deleveraging process. The gross debt was around 18,000 million at the end of September, mainly bonds (in euros, pounds, Swiss francs or dollars), and other instruments, while the net debt is 17,100 million. Under the plans designed by the company, in 2030, the debt would already be below 10,000 million, if there is no purchase. The firm does not need to refinance before 2024, and had, at the end of September, liquidity of 4,300 million euros, 900 million in cash and 3,400 million in undrawn credit lines. 77% of the debt is at a fixed rate.


This deleveraging, under investment grade, could lead the company to raise the dividend. This shareholder remuneration has been symbolic in recent years as the company has focused on growth.

In the corporate sphere, Cellnex does not rule out possible non-transformational operations, especially in countries where it is present, in order to gain new anchor customers. Austria or the Scandinavian countries are in the pools of analysts.

At the same time, the company is not shying away from acquisitions that help enhance its portfolio of products and services, such as the UK provider of indoor mobile connectivity technologies, Herbert In-Building Wireless, which was purchased in the autumn.

Activities of the Appointments committee

Members. The Cellnex Appointments, Remuneration and Sustainability Committee is chaired by Marieta del Rivero, Christian Coco, Pierre Blayau, María Luisa Guijarro, Alexandra Reich and Virginia Navarro. Its functions include examining and organizing the succession of the chairman of the board of directors and the company’s chief executive and, where appropriate, making proposals to the board of directors so that said succession occurs in an orderly and planned manner.

Korn Ferry. During 2021, the Appointments, Remuneration and Sustainability Committee relied on various external advisers, including Korn Ferry, to carry out an individualized assessment of potential successors to key positions in the company, provided for in the Succession Plan. The Committee reviewed the succession and contingency plans for the Deputy CEO and potential internal successors to him and discussed the possibility of cross-career moves for members of senior management, as well as for executives immediately below. In addition, the members of the Committee asked Korn Ferry to share the analysis carried out on the contingency plan for external candidates who could replace the CEO.

President. In addition, Korn Ferry carried out a succession process to appoint the new president of the board of directors, resulting in Bertrand Kan being elected, and the new presidents of the commissions. He also made the selection of a new director to fill the existing vacancy on the board of directors, which ended with the appointment of Kate Holgate.

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