CELLNEX TELECOM, S.A. is a company dedicated to telecommunication services and infrastructures, currently it is the main operator in Spain and provides services in 7 other countries. Cellnex was born from the sale of the business by Abertis, going public and sailing alone. On the other hand, Abertis would be absorbed by ACS and Atlantia and would no longer be listed on the stock exchange.
Its activity is divided into 4 main areas:

• Infrastructure services: It has more than 60,000 sites that it rents to telephone operators for their use.
• Audiovisual broadcasting networks: Similar to telephony, but for television broadcasting.
• DAS & Small Cells: System that provides wireless connectivity in reduced spaces to many users. Such as airports, shopping malls, resorts...
• Solutions (drawer of tailor): Internet of the things, Smart things and ideas at present little landed.

Cellnex has an attractive business and seems to be profitable. Will it be so?


The goal of this analysis is to understand how CELLNEX TELECOM, S.A.'s business is, to know how it is managed and to decide if it is an option to incorporate it into a Buy&Hold focused portfolio. We usually divide the analysis into 3 sections to better organize ourselves: the balance sheet, the income statement and the final valuation. As always, all the data shown in this analysis has been obtained from the CNMV website and you can consult many other ratios of the company in this page.


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1 Balance Sheet Analysis

To begin with, let's take a look at the capital structure of CELLNEX TELECOM, S.A., that is, what it spends the money on (and how much) as well as to whom it is owed (and how much). We will calculate some ratios and see their progression over time. We are going to organize it in the following points:

• 1.1 Analysis of the asset
• 1.2 Analysis of liabilities and net worth
• 1.3 Indebtedness
• 1.4 Safety margin
• 1.5 Liquidity/Treasury
• 1.6 Working capital

1.1 Analysis of Assets

The structure of the assets will indicate the degree of immobilization of CELLNEX TELECOM, S.A.'s resources. That is, how much of its total assets are fixed assets (real estate, investments, goodwill, etc). In this case:





The immobilization has been modified in these 5 years, as a result of the multiple acquisitions that the company is carrying out. For the moment it has varied and has even decreased by 70%, in the future we will see if it stabilizes or if it continues with ups and downs.


We will break down the asset as a function of time, so we will make visible which part is current asset and which part is fixed asset. Its variation over time can give us information on profound changes in the company:



In the graph of the breakdown of assets we can see how the absolute value of assets has grown enormously, hence the variation in fixed assets. Cellnex is making a very strong commitment to growth, we will see later how this feels for the income statement and the debt and liquidity ratios.
We will break down both to know the items that compose it, firstly the fixed asset:



In addition to the great increase in absolute values, we see that the item "Intangible assets" has been increased in proportion to the others. Cellnex explains this item as follows:
"Refers to the assignments of use acquired by the Group and which are valued at their acquisition price or production cost and are amortized on a straight-line basis over the contractual period, between 10 and 40 years."

They can range from land to radio spectrum licenses. Something that is not physically owned by the company, but has a value that must be accounted for and amortized.

The breakdown of the items is as follows:

• Intangible assets (55.73%)
• Tangible fixed assets (28.68%)
• Goodwill (13.07%)
• Deferred tax assets (1.38%)
• Non-current financial assets (0.94%)
• Other non-current assets (0.17%)
• Investments accounted for using the equity method (0.03%)

We do the same with the current assets:



In the case of current assets, cash has grown a lot, currently constituting 86%, almost 3 billion euros. As we say, this is the result of the capital received from the capital increases. As for the rest of the items, their proportion is as follows:

• Effective (86.41%)
• Customers by sales (9.48%)
• Current tax assets (2.13%)
• Other current financial assets (0.99%)
• Other debtors (0.86%)
• Stocks (0.13%)
• Other current assets (0.00%)

1.2 Liability Analysis

In this section we will see the structure of the liabilities of CELLNEX TELECOM, S.A., which gives us information about the origin of the resources available to the company. It tells us where the money comes from and to whom it is owed. To find out the proportion of capital belonging to the company compared to that belonging to others, we have the following formula:





The equity has also increased significantly over the past 2 years thanks to the capital increases made. Specifically, there have been 3 increases in just 2 years.
As with the assets, we will break down the items that make up each part of the liabilities. We will start with a grouped chart (net worth, fixed and current liabilities) and then break down each of them:



Seeing how the liabilities look in the stacked graph, we confirm what we have commented. On the one hand, liabilities/equity grows strongly thanks to the capital increases. On the other hand, both net equity and fixed liabilities are growing the most in proportion, with current liabilities lagging behind but also growing.
We started by breaking down equity:



The net equity grows supported by the items of minority interests (capital belonging to third parties of controlled companies but which is accounted for by having consolidated the accounts) and by the share premium.
. The big difference from a company that grows organically to one that is not here. Organic growth shows a gradual increase in reserves, which is a benefit from previous years that is not distributed as a dividend and becomes part of the capital base. Inorganic growth is what we see at Cellnex; equity grows through increases in the share premium.
The most important items that make up the net worth are:

• Emission premium (77.80%)
• Minority interests (18.05%)
• Reservations (3,14%)
• Registered capital (1.93%)

We continue with the current liabilities:



As for current liabilities, all items grow similarly. It should be noted that the debts to credit institutions in the short term are very low, we will see how the financial expenses are.
The most important items that compose it are:

• Suppliers (30.95%)
• Other short term financial liabilities (30.28%)
• Other creditors (19.74%)
• Current tax liabilities (11.14%)
• Short-term debt with credit institutions (5.32%)
• Other current liabilities (2.56%)

As for fixed liabilities:



Fixed liabilities are showing strong growth, especially now, thanks to debts with credit institutions. Although they are long-term debts, they are debts at the end of the day and have an associated cost. A little later we will see how this affects debt ratios and the company's ability to repay the loan.
The most important items that compose it are:

• Long-term debt with credit institutions (68.32%)
• Other long-term financial liabilities (10.96%)
• Deferred tax liabilities (10.25%)
• Non-current provisions (10.20%)
• Other non-current liabilities (0.27%)

1.3 Debt Analysis

Once we have seen the composition of the balance sheet in a general way, let's review some ratios. A very important concept in the valuation of a company is the debt, since a company that has no debts can not go bankrupt. The progression of the debt ratio tells us how big a company's debts are in relation to its own resources: