Cellnex Telecom, S.A. (CLNX) Earnings Call Transcript & Summary

Hello. Good afternoon. Welcome, everyone, to Cellnex Telecom's First Half 2026 Results Presentation. I'm Maria Carrapato, and it's a pleasure to be with you today again. Before we begin, as usual, I'd like to remind you that this presentation contains forward-looking statements. Please refer to the disclaimer included in the appendix in the slide deck. So Marco will open the presentation with the main highlights. Raimon will take you through the financial performance, and then Marco and Simone Battiferri, our COO, will close with some considerations on other industrial and strategic topics that are often raised by the market. So with that, let me hand you over to Marco.

Thank you. Thank you, Maria. Good afternoon, everyone. So before going into the numbers, let me frame the first half in one sentence. Cellnex is delivering exactly on the model we described to the market: predictable organic growth, expanding margins, accelerating free cash flow and tangible shareholder remuneration. Let me highlight the 4 key messages of the first half. First is that operational momentum remains strong. Organic Points of Presence growth reached plus 4.9% year-on-year, confirming sustained demand from customers across the entire portfolio. This translated into solid financial performance. Revenues grew by 5%, Adjusted EBITDA by 6.4%, EBITDA after leases by 7.7%, recurrent levered free cash flow by 11% and recurrent levered free cash flow per share by 18.1%. From a margin perspective, both EBITDA and EBITDA after leases margins increased by nearly 200 basis points, reflecting continued operational efficiencies and land management actions. The second is that free cash flow has entered a new phase, from EUR 19 million in the first half of 2025 to approximately EUR 301 million in the first half of the year. This allows us to reiterate our guidance. Third, we continue to deepen our customer relationship. Sunrise in Switzerland, Vodafone Spain, Telefónica in Spain are all examples of Cellnex being selected as a trusted infrastructure partner for network expansion, contract renewal and network resilience. And fourth, shareholder remuneration, which is delivered as committed. The EUR 500 million dividend has been paid, the EUR 300 million share buyback has been completed, and 11.3 million (sic) [ 18.3 million ] shares are expected to be canceled during the second part of the year, improving the per share metrics. I'm pleased to share that today, our Board of Directors has approved an additional share buyback program of EUR 200 million to be completed until the end of 2026. So overall, the message is clear. Our industrial position is translating into predictable growth, stronger cash and direct shareholder value creation as promised. With the announcement we are making today of an additional EUR 200 million in share buybacks, the total shareholder remuneration in 2026 will reach EUR 1 billion, combining the EUR 500 million of dividends already paid, the EUR 300 million of SBB executed in the first half of the year and additional EUR 200 million of share buyback just announced. Between 2025 and 2026, we will have returned a total of EUR 2 billion to shareholders between dividends and share buybacks, representing 11% of our current market capitalization. There's no doubt that the share buyback we are announcing is a highly accretive capital allocation decision, driving significant growth in per share returns and long-term value creation for our shareholders. With that, let me hand over to Raimon, who will take you through the financial and operational performance in more detail. Raimon, the floor is yours.

Thank you, Marco. Good afternoon, everyone. Let me start with the Slide 7, which summarizes the financial performance of the first half on a pro forma organic basis. The key message is simple. Cellnex continues to convert predictable top line growth into higher cash flow per share. Revenue growth was plus 5%. Adjusted EBITDA grew by 6.4% and EBITDA after leases grew by 7.7%. At the cash flow level, recurrent levered free cash flow increased by 11%, while the metric per share grew by 18.1%, reflecting both operational execution and disciplined capital allocation. On the next slide, we show the bridge from reported revenues to organic revenue growth. Starting from the first half '25 revenue base, perimeter adjustments bring us to a comparable pro forma base. This results in EUR 2 billion of organic revenues in the first half '26, representing 5% growth year-on-year, supported by price escalators and continued demand from customers. Moving forward, you can see Points of Presence continue to show healthy commercial momentum. In absolute terms, second quarter showed strong performance with more than 2,000 new net PoPs and positive contributions across our main regions. In the first half, gross PoP growth reached 5.7%, while net PoP growth was 4.9%. Importantly, this growth comes despite consolidation trends in some markets. Consolidation does not eliminate investment. Healthier operators continue to deploy more capacity, coverage and network quality. This is one of the most important messages from the first half. The need for densification remains strong, and Cellnex continued to capture that demand through both colocation and Build-to-Suit programs. The operational momentum translates directly into Tower revenues, as you can see on the current slide. On a pro forma basis, excluding Ireland, Tower revenues grew organically by 5.2%. Tower revenues remain the core growth engine of the group, driven by contracted price escalators, colocation and Build-to-Suit activity. This is the essence of our business model, growing coverage, improving densification and leveraging our existing asset base. Moving to Slide 11. Our other business lines also continue to provide growth upside. Fiber, Connectivity and Housing Services grew organically by 7.8%, adjusted for the French data centers disposal and supported by the continued rollout of the Nexloop project in France. DAS, Small Cells and RANaaS Service grew by 4.5% organically, supported by high demand in high-traffic locations, venues and complex indoor environments. Finally, broadcasting remained stable, growing by 0.5% organically, continuing to provide a steady and predictable revenue stream. We are providing you practical examples of how our industrial strategy translates into real commercial activity. First, in Switzerland, Sunrise and Cellnex have extended their long-term strategic partnership through an expanded Build-to-Suit program covering 300 additional sites. This supports the next phase of Switzerland's mobile network evolution and reinforces Cellnex's role as a scalable infrastructure provider. Second, in Spain, our legacy Vodafone framework agreement has been renewed for 10 years, covering approximately 2,000 existing PoPs. Importantly, the renewal has been signed on unchanged technical and financial terms, and Cellnex will also host a limited number of additional PoPs on existing infrastructure. Third, Telefónica and Cellnex have extended the backup battery partnership to a total of 3,800 sites, reinforcing network resilience and energy security after the recent blackouts. This reinforces our role as a trusted infrastructure partner and shows how resilience, energy security and network availability are becoming increasingly relevant customer priorities. Beyond our traditional Tower business, we are also expanding our presence in DAS and neutral host solutions. For example, Cellnex is deploying a multi-operator DAS at the new Valencia Football Stadium in Spain and expanding neutral host mobile connectivity along the Brighton Main Line in the U.K. These examples show how Cellnex is actively shaping infrastructure solutions for our customers' needs and the ongoing network investments. Turning to Slide 13. Operational efficiency continues to be a key lever of value creation for Cellnex. On a pro forma basis, cost per tower decreased by 3.3% year-on-year, maintaining a high level of operational quality across the portfolio. As a result, we continue to expand margins with EBITDA margin reaching 84.6% and EBITDAaL margin increasing to 61.8%, the highest level achieved in recent years. This reflects the operating leverage embedded in our business model that benefits from our efficiency initiatives and the continued progress of our land management program. In short, we are not only growing revenues and cash flow, we are doing so with greater industrial efficiency, supporting sustainable margin expansion and value creation for shareholders. Next slide shows the cash flow bridge from the first half '26. Starting from EBITDA after leases, we reached recurring levered free cash flow of EUR 908 million and free cash flow after expansion and Build-to-Suit CapEx reaches approximately EUR 301 million. The 3 key drivers behind the result are the solid operating performance and efficient capital and tax structure supported by optimized cost of debt and lower Build-to-Suit CapEx intensity as the Build-to-Suit cycle normalizes. On Slide 15, shows the free cash flow inflection point where it's clearly visible. Pro forma organic recurring levered free cash flow increased by 11% and recurring levered free cash flow per share increased by 18.1%. The share buyback program is enhancing per share value creation, while the business itself continues to generate stronger underlying cash flows. At the same time, free cash flow increased from approximately EUR 19 million to EUR 301 million in the first half '26, an increase of approximately EUR 282 million year-on-year. FCF generation is no longer a future promise. It is happening now and it's accelerating. Our liquidity and funding position remain very strong. At the end of the first half '26, liquidity stood at approximately EUR 5.3 billion, including circa EUR 2 billion of cash and EUR 3.3 billion of undrawn committed credit lines. As such, our 2026 and 2028 maturities are largely funded, giving us flexibility to navigate market windows. With that, let me hand back to Marco to discuss some broader industry dynamics and why they reinforce our confidence in the long-term investment case. Marco, over to you.

Thank you, Raimon. I would like now to step back from the financial results for a moment and discuss the broader industry backdrop. This matters because our equity story is also about why demand for our infrastructure will remain strong for many years. The next slide addresses some of the topics investors raise most often: traffic growth, direct-to-device satellite, Europe's competitiveness and digital sovereignty, and MNO consolidation in France. For us, the conclusion across all 4 topics is consistent. Europe needs more infrastructure investment, and Cellnex is one of the best-positioned platforms to capture this investment cycle. The topic is very technical. So my colleague, Simone Battiferri, our Chief Operating Officer, is also joining us today, and he will walk you through trends in mobile data growth and explain some fundamental concepts on direct-to-device satellite connectivity. So Simone, make it simple, please, and drive us through the mystery of the technical stuff.

Thank you, Marco, and good afternoon, everyone. Well, looking at Slide 18, the key message is that we see a clear positive inflection point in mobile data growth. And in fact, it is accelerating again. Global mobile network's data traffic increased by 22% between first quarter '25 and first quarter '26, confirming that demand for mobile capacity continues to expand at a sustained pace. Importantly and curiously, this acceleration is not yet AI-driven. Latest industry traffic levers make it -- they are gone clear. AI applications are still a very small portion of total traffic, let's say, low single digits today. And there has not yet been a visible AI-led inflection in mobile uplink trends. The main growth drivers remain video streaming, the expansion of FWA and the increasing penetration of 5G devices. And this matters because Europe is still in the middle of the 5G adoption cycle. 5G-enabled devices represent only half of the mobile connections in Western Europe today, and adoption is expected to move close to 95% by the end of this decade. Well, the implication is clear. 5G subscribers already consume around 3x more than a 4G user on average. And 5G traffic per user is expected to further double in the next few years. So the maths are simple. As the customer base continues to migrate to 5G in the coming years, overall traffic will increase significantly. Underlying consumer behavior is, therefore, still pointing to data growth above 20% and more network capacity will be required, just only to avoid congestion and preserve service quality. At the same time, the nature of traffic is changing, too. The network is not only being asked to carry more data, but to carry more demanding data. AI-enabled applications, real-time collaboration, industrial automation, connected devices, future wearables will require networks that are more responsive, more reliable and more available indoors. They will also increase the relevance of uplink capacity, making networks demand progressively more symmetrical than in the past. So mobile networks are entering a new phase. The question is shifting from do I have coverage to do I have guaranteed quality, and quality means higher capacity, stronger indoor performance, more predictable service levels, better reliability, higher uplink capacity and lower latency. The physics of the networks at the end are simple. Carrying more data requires more capacity. More capacity generally means using more spectrum and adding higher frequencies. Higher frequencies deliver more bandwidth, but at the same time, they propagate over shorter distances, requiring a denser grid of cells. Furthermore, they penetrate buildings less effectively, which makes dedicated indoor coverage increasingly important. The only way to solve that equation is to bring the network physically closer to the user. That means densification, particularly in urban areas that translate into more indoor systems and a larger and more capable infrastructure footprint. So if we go to Slide 19, let me address another topic we are increasingly asked about by our investors, that is the direct-to-device satellite connectivity. Let me start by saying clearly that satellite is a powerful and valuable technology. D2D can play an important role in the broader connectivity ecosystem, especially in remote or underserviced areas where terrestrial coverage is technically difficult or impossible or even economically inefficient to deploy. But satellite and terrestrial networks are designed to solve very different problems. Terrestrial networks are optimized for capacity, latency, reliability and indoor performance. Satellite networks are optimized for extending coverage over very large areas. The reason is not only technological, it is physical. A terrestrial network can reuse spectrum every few hundred meters, serving a very large number of users simultaneously with high capacity. A satellite beam on the opposite, covers a much larger area, shares capacity across many more users and has far less ability to reuse spectrum effectively. This is why the average downlink capacity of a satellite D2D connection is today less than 0.1% of a terrestrial mobile network in urban areas and less than 5% in remote locations. So in practical terms, even when constellations are fully deployed, the service will remain much closer to a 2G-like experience, valuable for essential connectivity, messaging and potentially basic voice, but not comparable at all to mobile broadband. Distance is another fundamental constraint. A low earth orbit satellite is typically hundreds of kilometers away from a handheld device and sends a vertical signal that in urban and suburban environments must pass through multiple physical obstacles before reaching the user. By contrast, the mobile antenna tower is usually a few hundred meters to a few kilometers away and projects a horizontal signal designed to serve users with much higher capacity and better penetration into buildings. This is particularly important because most mobile traffic is generated indoors. So we are talking about 2/3 where satellite signals face structural limitation. The differences define the role that direct-to-device can play, an excellent complement for coverage, but not a total substitute for terrestrial capacity. So if you go to summarize the key takeaways in Slide 20. First, satellite D2D is fundamentally a coverage solution. Its strongest use case is systemic basic connectivity to remote or hard-to-reach locations. A clear evidence of these days is the emergency connectivity provided by satellite during the wildfires raging across Spain and France. Second, the capacity gap versus terrestrial networks is structural and rooted by physics itself. Satellites are much further away, beams cover much larger areas, spectrum is reused far less efficiently as signals face more difficult propagation and penetration conditions. So even if there is a major future technology breakthrough in direct-to-device, the satellite capacity will remain multiple times lower than mobile terrestrial networks. Third, indoor performance remains a fundamental limitation, particularly because most mobile traffic originates indoors. Fourth, handset battery life and antenna constraints create additional challenges for uplink capacity and user experience. So let me say that the conclusion is clear. Satellite direct-to-device does not replace the need for macro towers, network densification or dedicated indoor solutions. As mobile traffic growth and quality requirements increase, especially in urban areas, investment in terrestrial mobile infrastructure will remain essential. Well, back to you, Marco.

Thank you, Simone, and thank you for this jump into the technology. I think you made it simple and clear. So really thank you for your effort. So Europe faces a clear challenge in terms of digital competitiveness. Average mobile download speed in Europe is around 86 megabits per second, materially below North America, China, Korea, Japan. This gap is increasingly recognized as a strategic issue for competitiveness, resilience and security of our continent. GSMA estimates total mobile investment needs in Europe at around EUR 475 billion over the next decade, EUR 270 billion just to maintain the ordinary technology cycle, which explicitly includes densification to improve quality, coverage and performance, plus EUR 200 billion more if Europe wants to regain connectivity leadership. I would like to call your attention to yesterday's announcement by AGCOM of the spectrum renewal public consultation process in Italy and the network performance metrics expected from the MNO. And please consider that similar regulatory processes are advancing in Portugal and France. The proposed obligations include investments in transport routes, 5G stand-alone coverage, network resilience and AI-ready networks, all areas that are infrastructure intensive. And we haven't even begun to talk about 6G, which is expected to kick off in 2031 or 2032. This is the core message for investors. Europe cannot close the gap with spectrum alone or software alone. It needs physical infrastructure, more densification, better resilience, higher quality networks. And Cellnex is uniquely positioned to provide an efficient, shared and sustainable platform to deploy those networks. Let me finish with France, which is one of the topics that animates quite the discussion around Cellnex. Our view remains constructive. We believe consolidation has the potential to create stronger operators with greater capacity to invest in network quality and infrastructure. As shown on the slide, our direct exposure remains manageable, while the process itself is expected to be lengthy, involving regulatory review approvals and a very long transition period, and timing is important. Operators are unlikely to make long-term decisions based solely on the network requirements that we see today. By the time the consolidation process is fully completed, traffic volumes, 5G penetration, digital user patterns will be significantly different from where they are today, as we already discussed with Simone. In that environment, operators will need better networks, not smaller networks. Over the past decade, France has been adding around 5,000 PoPs per year, reflecting the industry's ongoing need to invest in network capacity and quality. And despite that level of investment, France still ranks only 21st in Europe and 34th globally in mobile network experience, highlighting the significant room for improvement that still exists. That is why we believe it is important to look beyond the analysis of the respective networks today and focus on the network that operators will need 5 years from now. Stronger operators with healthier balance sheets will be better positioned to continue investing, densifying and improving network performance. Our objective is, therefore, to remain constructive and proactive working alongside our customers to support that next phase of investment. So if we step back from all these industry trends, the message is remarkably clear. Mobile traffic continues to grow. Europe needs to improve its digital competitiveness. Satellite enhances connectivity but does not replace terrestrial capacity. And market consolidation can create stronger operators with greater ability to invest. When we look across traffic growth, digitalization, AI adoption, network quality requirements and market consolidation, we arrive at the same conclusion. Europe will need more network capacity, more densification and continued infrastructure investment. In short, the future requires better networks and better networks require more infrastructure. Maria, it has been a little bit longer than usual. Please, I would like to excuse with our investors and analysts, and back to you.

Thank you, Marco, Raimon and Simone for very clear explanations. So we're now open to take calls.

The first question comes from Ondrej Cabejšek from UBS.

Can you hear me now?

Yes, we can.

Very helpful additional color. I had 2 questions, please, both topics that were touched upon. So the first one was on the French deal, just from a regulatory perspective. We now know that this will be analyzed locally. And I was wondering whether from your perspective, there might be any differences to the kind of remedies that you would expect around, say, investment obligations. And obviously, the reason I'm asking is that while we have some commentary from the French authorities around the need to improve networks, it is perhaps not as explicit as a policy as it is from the European Commission with the [indiscernible] report. So any implications of the local jurisdiction versus EC in France would be very helpful. And then the second question, Marco, you touched upon this, but the -- and Simone, I guess, as well. But the AGCOM proposal yesterday where the network obligations are, I guess, very conducive for someone like yourselves. So I guess there are 2 dimensions I would appreciate if you could give us color on. One are the coverage obligations and looking at the targets that they set out or AGCOM set out, I was wondering what kind of increase in the number of sites and the physical infrastructure that you were talking about, do you reckon is needed to comply with these numbers? I believe it would suggest something like 20% to 25% to reach some kind of good coverage in Italy or up to 12,000 sites. So is this roughly your estimate as well that Italy should see kind of an increase in the number of towers similar to that? And secondly, and perhaps more technically, the regulator says there will be a minimum download speed requirement of 150 megabits per second. You make the point that data traffic continues to grow and Ookla reported median speeds in Italy at 1Q exactly half of this proposed floor. So on that one, I was wondering how these higher speed requirements could translate into more business for you? And again, any estimate of like increases to get there would be very helpful.

Yes, sure. So on the regulatory France versus Europe, I think that it has been a good decision because I expect that the French regulator will be closer to the market, closer to the interest of the French. At the end, when you design a new -- when you make a new market design, you're asking to a country to renounce to something, which is the competition on the market. So you're making something that is very important. And so the citizens, the nation, the community needs to receive something in exchange. So it's good that the regulator is French, but I'm 100% sure that there will be a super strong bonding and connection between the French regulator and the EU authorities. So ultimately, there will be more or less -- it will be more or less the same with, let me say, an easier accessibility of all the parties that are involved vis-a-vis the regulated authorities. So remedies, I expect to be the usual ones, the ones that we expect. It's not what, it's the size probably that will be decided by the authority. This brings me to your second question. Your second question is, well, 12,000 new sites is mid-high in my expectation. I would have said 10,000 to 15,000. So 12,000, you are in the mid-high part of the Italian need. How much coverage, how much densification? I think that the coverage has a permitting process way easier. And but it has to be thought, I would say, with a business model that has to be more convenient for the operator. I would strongly suggest to have more densification -- more sharing, more colocation. So this is what is needed. Now your technical part on the speed. You know that when you move from the current 5G to the 5G stand-alone, you're not touching just the transmission because the transmission at the end is limited by the core network. So now a good part of the problems in speed, latency and responsiveness of the network depends also on the fact that the core networks of the operators are not designed for the 5G stand-alone. This is something that most of the mobile operators make very clear every time. My old friend, Pietro Labriola makes clear every time he has to invest a lot on the core network. Core networks are expensive. Yes, core networks are relatively expensive, not dramatically expensive, a few hundred million euros. But the problem is that it's a few hundred million euros each. So you cannot, it's very difficult to share a core network. So if you can be efficient in towers and in transmission, in transport is less obvious. So if you put in your model something on core network, you don't make a mistake. I hope I answered, Ondrej.

Okay. So the next question comes from Andrew Lee at Goldman Sachs.

I had 2 questions. And firstly, I just want to say thanks for the satellite technology articulation around the debate. Obviously, a lot of misunderstanding or lack of understanding there. And I think articulating is really helpful, especially given that I think operators have really struggled to do that, which has not helped the conversation. But moving on, I have 2 questions. Firstly, just wanted to ask, have you seen any signs of post-consolidation densification acceleration by operators in Spain and the U.K.? Obviously, it's a key area of confidence building in the consolidation debate. Do you have any visibility yet on when this will begin given it doesn't look like it started yet? And then second question, there was a press article a week ago suggesting that Cellnex had been examining strategic options, including buyouts, large-scale mergers. I just wanted to ask, is there any truth to this? I'm not expecting you to comment on specific examples, but do you think there is a material strategic option available? And in the context of this, I just wonder if you could comment on why you chose to buy back shares rather than pay down debt today?

Okay. So definitely, your 2 questions are 3. Andrew, let's start from consolidation and Spain and U.K. In Spain, we started to see something happening. MasOrange is well advanced in their integration phase. You saw that last year, we had a big bulk of their consolidation. In the second part of this year, we will have a second step that we agreed with them. But as before -- now they are working on 2 areas. They are working very seriously on transportation corridors. Transportation corridors, MasOrange is making this as a strategic investment area. And they are starting using small cells way more than what was done in the past, especially in problematic dense urban areas. So this is good because we are working very strictly with them. It's not particularly known, but we are the largest operator in Europe in DAS and small cells. So we have big know-how and in particular, our Spanish chapter is possibly the most advanced that we have in the group. U.K., unfortunately, it's taking longer than what we expected. So we don't change our view. So the fact that something will happen, I'm totally sure that something will happen that there will be a need of some thousands of sites that have to be built, both urban and nonurban. So we are talking about several thousands of sites that we, in our network simulations that we see. For the time being, different from other markets, the carrier-neutral model for, again, transport lines. So the Brighton Main Line is something that possibly some of you use every day when the coverage is provided by us. So this is something that, again, we see, but unfortunately not in the order of magnitude that we expect. Is it something I do expect for 2026? Honestly, doubtful. Is it something that I expect for 2027? Yes, definitely. On strategic options, I read what my lawyer wrote me. So I state to my -- he is here in the room looking at me. So as a leading European player, it's natural that the company may attract investor interest at current valuation levels. However, we are not familiar with the conversation referred to the article. So apart from being very well written, you get the sense. Yes, it's convenient this price for [indiscernible], the reason why we're making the share buyback. So your third question is why share buyback and not debt repayment? Well, our cash generation is doing well. And we're convinced that we can do well for the entire year. And this means that we, as I told, we entered in a different phase in which cash is going to be very evident. We are not changing our overall targets for capital structure. But today, the share price does not reflect our vision on the intrinsic value of the company. Headwinds are, in my view, overestimated in our price and tailwinds that Simone was saying are not included. So the Board is convinced that allocating EUR 200 million to share buybacks at this moment generates value to the shareholders, not only in the short term, but most importantly, in the long term. And this is why the moment is correct for doing it now.

Okay. So the next question comes from Akhil Dattani at JPMorgan.

Marco, maybe I can start with the shareholder return comments you just made and maybe just ask for a bit more color. I understand, as you mentioned, it's a reaction to seeing value. But I guess I'd love to understand the general framework you're using in terms of thinking about what you want to do because over the last couple of years, we've had a few add-on buyback decisions that you've taken as you felt it was appropriate. If we try and step back and think about the journey going forward, can you sort of help us frame how you're likely to approach your decision on buybacks? Is it going to be opportunistic based on share price? Is it going to be based on more framework-driven decision-making? So just if you could just elaborate generally how you're thinking about the philosophy of what you're likely to do, that would be super helpful? And then the second one was the topic you've mentioned around tailwinds. You talked a lot about various opportunities. One opportunity you didn't mention, which your U.S. peers talk about a lot is edge computing. And I'd love to understand what your general thoughts are. I appreciate it's a long-term topic, but the U.S. Towercos are already starting to make investments in this space. Do you see it a little bit like small cells where the U.S. pushed hard and ultimately didn't amount to a huge opportunity? And I guess you didn't pursue that at the time? Or is it different this time? Is this something that you similarly also see it being an interesting opportunity for towers midterm?

Well, on the philosophy, you remember, we made very clear that we have a dividend policy that we're not changing. So our dividend policy is EUR 500 million grow at 7.5%, blah, blah, blah. You remember, we are delivering. We paid the EUR 500 million, and you can bet that next year, we will do EUR 500 million plus 7.5%. Second, we said the minimum we're going to do is EUR 800 million and the delta between dividends and EUR 800 million is depending on the value creation. The value creation is in this moment clearly coming from share buybacks. I wouldn't describe this as opportunistic. I would describe it as logic or if you want fundamental analysis. So there is a big difference between yesterday, today and tomorrow. Yesterday, we made share buybacks because we had some extraordinary disposals and which make available some extraordinary money that we used. Today, we are making a decision that is based on our capacity to generate cash flow, which going forward will remain generous and abundant. And we said that we will allocate the extra capacity in a way that will generate more value to our shareholders. As of today, the Board made the decision that share buyback was the way. So I would say that this is the philosophy. So let's consider what is the value creation, where the value creation comes from. Let's see what are the resources available -- structurally available, and let's do it. So on your second question, it's very interesting because Simone and I, we have been discussing this topic not less than 5 times in the last 2 weeks. If I look what has been done today by, look, for example, Nvidia and Nokia, it's not really an edge computing on a tower. It's an AI integrated equipment with a sort of self -- or AI-driven configuration of the equipment. So it's not really edge computing on the tower. But I'm convinced that the more we enter into distributed AI, the more a system that brings everything to the center is tremendously inefficient in terms of traffic load. So every time you have to transport a lot of data that most of the time are useless. So imagine that you need some AI for self-driving vehicles. Do you really need to have data going to U.S. and coming back or it's better to have some maps on a tower that is 300 meters from you? I think that this is something that can happen, but it's really at the moment, a bit unclear how it will happen. And Simone is working very actively. Simone has been in the IT and in the semiconductors for a good part of his career. So we are activating our contacts. Just Stage 1, I think, is better understanding. I see an opportunity, but as you said, it's a midterm opportunity more than a short-term one. I hope I answered.

Okay. So the next question comes from Rohit Modi at Citibank.

I have 2 please as well. One is a follow-up on Andrew's question on the article, and I understand you can only talk to some extent on it. But in general, your discussions with private players, how do you see -- what are the key constraints that you see in terms of valuation of Towers? I mean, apart from rates is what is going on in Italy and partly in Spain, a kind of rippling effect in the way private players see now TowerCo valuations with all the renewal risk. And yes, so any color around that? And secondly, you said -- you mentioned about the cash flow generation was pretty strong in the 1H. Again, looking at the 1H number and the phasing you had in the last 2 years on your free cash flow and recurring levered free cash flow, you are heading kind of towards the upper end of your guidance. Is that the kind of base we should look for the second half and full year? And should that be the base for the next year in terms of when you look at the guidance range?

Good. I'm looking at my lawyer for that, I can't add very much because what I can tell you, we trade at 14x. We trade at 14x. It's 14x, we trade at more than 10% recurring levered free cash flow per share yield. I think that there are numbers that speak for themselves. We are large. We are diversified. So what I can tell you -- honestly, I have very little to add. Cash, Raimon.

Rohit, look, during the year '26, as you have seen, we have massively increased the free cash flow. There is a changing point to a situation where we're going to be this year between EUR 600 million and EUR 700 million that we gave as a guidance, but will grow next year to a level that is from EUR 975 million to EUR 1,075 million. We are reiterating our guidance, and we are not expecting any change on that. This year, we are on halfway, half the year, halfway in the free cash flow. Second part of the year, we will see as the first half, some Build-to-suit still coming. We will still have some of the growth coming from the colocation and all of it will help us achieve the guidance that we have given to the market. We are not giving any short-term guidance or anything similar because we are just expecting to be as promised between the EUR 600 million and the EUR 700 million.

Okay. So now moving to the next question. We have Roshan Ranjit at Deutsche Bank.

I've got 2 operational ones actually. Firstly, turning to Spain and the renewal of the framework agreement with Vodafone Spain. So I think the first part, very clear, renewal of existing PoPs on the same conditions. But you've also added additional new PoPs. So I just wanted to get a sense of the kind of, I guess, level of discipline in that market. Clearly, one operator has been very strong about wanting to move. So is there scope for those additional PoPs to go higher that you could offer? I know, Marco, you've been very clear on the kind of degree of overlap in that market. Is that still a big barrier for any kind of operator to switch, please? And the second question, again, on the operational side in France, we've seen a pickup in the BTS deployment. It seems quite evenly split between Bouygues and the SFR Build-to-suits. How should we think about that going forward in the context of the kind of ongoing regulatory review? Because I know previously, there has been talk about synergies from potentially combining Build-to-suits? Or is it kind of business as usual in terms of the deployment until we get a little bit of news flow through the year or perhaps next year?

Thank you, Roshan. So Spain, our goal #1 was we had 2,000 PoPs, which were secondary PoPs that were expiring. We wanted to renew. And our Spanish team has been able to renew at the same terms and conditions we had before. So tick the box that we made another renewal without suffering, which is one of the many headwinds that time to time we would face. So we continue to renew ordinary course of business. The second part of your question, we have been asked making an analysis if some of our towers could be eligible for hosting antennas from Vodafone. We made a technical analysis. So some towers, the answer was yes. Some towers, the answer was no. And we applied the usual price list. So we did not make any special favor. And we have been asked to host some hundred antennas, which is good. Now to your point, is it something? Is it new deployment or, sorry, I'm not the CTO of Vodafone, and so is it densification? Is it coverage? Is it, to say the truth, I don't know, possibly it's densification. Second, France, did something change in our Build-to-suit program due to the SFR split? Of course, yes. It's obvious. What we are doing is, there are areas that are not under discussion, all the Crozone or let me say, all the non-dense urban zone is coverage and coverage is coverage. If there is not enough network, we build the network and it's good. By the way, we continue to insist to the concept of colocation to suit. So every time we build a tower, we strongly insist to have more than one operator in order to make those networks more efficient, first of all, for them in order to avoid that those networks become way too expensive. And in the urban areas, of course, we are working more prudently. We have to avoid to generate new overlaps even though the consolidation takes time. So there is some business as usual, but business as usual with good common sense. So let's avoid to create today the problem of tomorrow. I think that in this, everybody is well aware. The attitude is constructive. And we have several years of experience with all of them. So we're working well with them.

Okay. So the next question comes from Ulrich Rathe from Bernstein.