Cellnex completes its strategic transformation

The European leader in telecom towers is changing its profile from a growth company to a dividend-paying firm.

In 2023, the abrupt change affecting the macroeconomy—with post-pandemic inflation aggravated by the invasion of Ukraine—triggered inflation and interest rates and forced Cellnex to change its strategy: from a buying spree to consolidation and from being a growth company that asked the market for money (it raised €15 billion from investors in less than five years, during which it invested almost €35 billion) to becoming a "normal" company, in which organic growth and dividends play a key role. Faced with this situation, Tobías Martínez , the CEO who had created Cellnex from scratch, believed that the new era warranted a new management team and left his position at the helm of the European leader in telecom towers. This transformation from growth to yield saw a new CEO, Italian Marco Patuano, who had been president of Cellnex on behalf of the Benettons and who took over at the helm of the tower company in June 2023. Since then, the company has undergone a major transformation that is about to be completed, moving from a growth company to a dividend-yielding one.

To this end, it has sold or is selling subsidiaries in European countries where the group saw no growth potential due to their size or competitive position. In September 2023, it closed the sale of 49% of its business in Sweden and Denmark to the Stonepeak fund for €730 million. And in November of that year, it also sold its private 5G networks business for industrial use—too small to generate sufficient scale—to the US-based Boldyn for €30 million. In March 2024, it divested its Irish subsidiary to PTI for €971 million, and in August of last year, Cellnex divested its business in Austria, selling it to a consortium formed by Vauban, EDF Invest, and MEAG for €803 million. In addition, it is finalizing the sale of Switzerland, a company valued at between €1.5 billion and €2 billion, in which Cellnex holds a 72% stake, representing a net investment of between €1.08 billion and €1.44 billion for the Spanish company. The Swedish fund EQT is the leading candidate for the acquisition.

This will be the last major divestment, as it is currently only considering the sale of its data centers in France, a very small business. It also aims to expand its business beyond towers, increasing its stake from 11% to 15% by 2027.

Furthermore, to improve its margins, the tower company is addressing the cost of its sites and has created a subsidiary to purchase the land on which its towers are installed, to avoid artificial inflation. The new company, Celland , will invest more than 200 million annually in the future to increase the current meager 14% ownership of the land where its towers are located to levels more similar to the 70% held by US tower companies. It has also approved a collective redundancy plan for 209 people in its mature telecommunications network maintenance business in Spain. The collective redundancy plan affects 21% of the workforce at Tradia and Retevisión, the two affected companies.

With the resources obtained from divestments and its cash generation, Cellnex achieved S&P investment grade in March 2024—one of its strategic objectives—and launched a debt reduction plan. From nearly 8 times EBITDA in 2021, it dropped to a ratio of 6.4 times in 2024 and between 5 and 6 times in 2025. It can continue to reduce its debt at a rate of around 0.5 times EBITDA each year.

Furthermore, the company made a long-term commitment to clarify the destination of the 10 billion euros in cash it will generate by 2030. Part of this has already been defined, as it will pay a much larger dividend than the symbolic 50 million euros/year it paid in the past.

At Capital Market Day in March 2024, it promised investors that it would pay at least 500 million euros in dividends annually between 2026 and 2030, or 3 billion euros in total. However, after allocating 800 million euros in the first months of 2025 to a share buyback plan to be redeemed—3.41% of capital—it has raised the annual dividend floor for the next five years to 800 million euros, which amounts to approximately 4 billion euros. It remains to be seen how the remaining 6 billion euros will be allocated.

Overall, Cellnex continues to maintain a high level of investment—€6 billion over the last three years in the countries where it operates—due to its commitments to its telecom customers to build new towers ( build to suit ) and support their 5G rollouts. This has slowed its deleveraging pace but, on the other hand, continues to drive organic revenue growth. Thus, in the first half of the year, it managed to grow 6% in organic revenue—although it only grew 1.1% in reported terms due to sales in Ireland and Austria—while organic revenue from its tower business increased 5.2%.

Consolidation is also pending in Spain, where there are four major tower companies— American Tower, Cellnex, Vantage, and Totem —when the Masorange merger will result in only two—or two and a half—5G networks in the country in the medium term.