Inwit (AO) | Hold | Focus on the dispute with anchors

Research evidence excerpt

Inwit (AO) | Hold | Focus on the dispute with anchors

Inwit Hold | Target Price: EUR7.50

Company description Management

Inwit (Infrastrutture Wireless Italiane) is the largest independent operator and Oscar Cicchetti, Chairman

developer of telecom wireless infrastructure in Italy, managing a portfolio of c. Diego Galli, General Manager

22,000 sites, which represents more than a 40% share of the total number of Emilia Trudu, CFO

telecom towers in Italy. Telecom Italia and Vodafone are its main clients, Key shareholders

accounting for more than 75% of total estimated revenues in 2022E. Vantage Free float 31.50%

Towers and Ardian are the largest shareholders with 33% and 30% stakes, Central Tower Holding Company 37.60%

respectively. Daphne 3 30.90% Treasury shares 3.20%

Investment case Valuation methodology

Inwit has now lower visibility on cash flow generation due to the We value Inwit using a DCF model (WACC 6.5%, G: 2%).

dispute with anchor tenants, TIM and Vodafone, (at least According to our sensitivity analysis, a permanent change of

beyond until 2028). However, the business model offers inflation 100bps in the risk-free rate would have an impact of c. +/-17%

protection and generous shareholder remuneration. on our estimated equity value.

We see a number of headwinds over the coming years that pose Inwit trades at >8% recurrent free cash flow 2025E, but <6%

some risk to earnings and guidance. Inflation in Italy is receding, total FCF, with a dividend yield of >7% not covered by total FCF.

the mix is diluting the revenue per PoP, volumes from OLOs and In our view, Inwit deserves a discount to Cellnex.

DAS/small cells could also disappoint, consolidation and re- Risks to our rating

pricing are new threats. Slowdown in 5G rollout, mainly from anchor tenant, re-pricing