Ihs Holding Limited · NYSE:IHS
Ihs — Q4 2023 Earnings Presentation
36 slides from Ihs's earnings presentation, Mar 12, 2024
Slide 1: IHS Towers 4Q/FY23 Earnings Results
IHS TOWERS 4Q/FY23 EARNINGS RESULTS | MARCH 12, 2024 Towers of strength
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Information This presentation contains forward-looking statements. We intend such forward-looking statements to be covered by relevant safe harbor provisions for forward-looking statements (or their equivalent) of any applicable jurisdiction, including those contained in S
Slide 3: Presenting Today
PRESENTING TODAY Sam Darwish Steve Howden Colby Synesael Chairman & CEO Executive Vice President & CFO Executive Vice President of Communications 3
Slide 4: IHS Track Record
IHS TRACK RECORD One of the world’s largest independent and multinational owners, operators, and developers of shared communications infrastructure Revenue Adjusted EBITDA (4) (5) $M +14.6% $M • Capitalize on significant Revenue CAGR 2019-2023 growth opportunities in 2023 Organic Growth of existing
Slide 5: 4Q23 Performance
4Q23 PERFORMANCE Revenue Adjusted EBITDA (2) & ALFCF (3) (4) $M $M • 4Q23 revenue of $510M (3.1%) +0.6% decreased (3.1%) 4Q23 Revenue 4Q23 Adjusted EBITDA Growth Y/Y Growth Y/Y (organic +48.4%) Y/Y • USD:NGN devalued by +48.4% +22.0% 45% from 446 in 4Q22 to 4Q23 Organic Revenue 4Q23 ALFCF 815 in 4Q2
Slide 6: IHS Global Tower Portfolio
IHS GLOBAL TOWER PORTFOLIO In 2023, we built +1,329 towers (vs. guidance of ~1,250) including +812 in Brazil (vs. guidance of ~750) and +237 in Nigeria (vs. guidance of ~200) 40,075 3rd Largest Towers on 3 Continents (1) Independent Multinational TowerCo Globally By Tower Count (1) Egypt(2) - 222,83
Slide 7: Highlights
HIGHLIGHTS Commercial Progress Governance Progress Stock Liquidity • Total Contracted Value of $11B with average remaining tenant term • In Jan. 2024, reached a settlement agreement with Wendel • Post-IPO shareholders own ~14% of non-diluted shares outstanding vs. of 7.5 years reflecting a commitmen
Slide 8: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY Sustainability Initiatives in 4Q23 Our Strategy Four-pillar Sustainability Strategy • Ethics and governance • Environment and climate change Ethics and Environment and Education and Our people and • Education and economic growth governance climate change economic growt
Slide 9: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT FY22 FY23 Y/Y^ 4Q22 4Q23 Y/Y Towers (#) 39,652 40,075 1.1% 39,652 40,075 1.1% Tenants (#) 58,573 59,727 2.0% 58,573 59,727 2.0% Colocation Rate 1.48x 1.49x 0.01x 1.48x 1.49x 0.01x Lease Amendments (#) 31,674 36,603 15.6% 31,674 36,603 15.6% In US$M, unless stated Revenu
Slide 10: FY23 Consolidated Revenue Walk
FY23 CONSOLIDATED REVENUE WALK FY23 Revenue $M Total Growth Total Growth +$164M or +8.4% Organic Growth +$723M or +36.9% +8.4% +$164M Organic Growth +36.9% +$723M 2,126 Organic Growth 1,961 by segment 446 +46.5% Nigeria +15.9% SSA +15.7% Latam 6.8% 13.4% 1.0% 1.3% 3.2% 3.0% 1.6% 6.5% 2.9% (31.4%) (1
Slide 11: 4Q23 Consolidated Revenue Walk
4Q23 CONSOLIDATED REVENUE WALK 4Q23 Revenue $M Total Growth Total Growth ($16M) or (3.1%) Organic Growth +$255M or +48.4% (3.1%) ($16M) Organic Growth +48.4% +$255M 526 Organic Growth 510 by segment +65.5% Nigeria +12.0% SSA +16.6% Latam 5.0% 27.0% 0.7% 1.2% 3.4% 1.6% 2.8% 6.8% 0.1% (51.7%) (1) +6.4
Slide 12: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA Revenue $M 2,126 1,961 41 603 36 200 4Q23 10 160 526 46 546 503 Revenue Growth Rate Y/Y 10 510 413 44 10 48 467 (1) 122 11 (3.1%) 54 18 (2) 48 123 52 10 117 48 (1) 124 133 ($16M) 1,382 1,352 1,334 1,334 425 377 365 355 321 271 • 4Q23 revenue decreased (3.1%)
Slide 13: Adjusted Levered Free Cash Flow and Capex
ADJUSTED LEVERED FREE CASH FLOW AND CAPEX Adjusted Levered Free Cash Flow (1) $M 433 4Q23 (2) 43 Adjusted Levered (2) 155 Free Cash Flow (2) 43 363 (3) 118 18 97 86 $118M 74 • 4Q23 ALFCF increased +22.0% Y/Y 4Q22 1Q23 2Q23 (4) 3Q23 (4) 4Q23 FY22 FY23 • FY23 ALFCF increased +19.2% Y/Y ALFCF Cash Conv
Slide 14: ROIC and Capital Allocation
ROIC AND CAPITAL ALLOCATION ROIC (1) (2) FY23 Capital Allocation $M ROIC As of December 31, 2023 14.6% 14.6% 12.4% In 2023 11.0% $600M • Operating Profit grew ~70% 9.9% Capital Allocation 10.0% FY23 • Built 1,329 New Sites for $92M • Invested $103M on Project Green • Continued to build out I-Systems
Slide 15: 4Q23 Segment Performance Highlights
4Q23 SEGMENT PERFORMANCE HIGHLIGHTS Revenue and segment Adjusted EBITDA in $M 4Q22 4Q23 Y/Y Towers 16,995 16,395 (3.5%) Nigeria Tenants 26,210 26,009 (0.8%) Lease Amendments 30,218 33,999 12.5% Revenue 355 321 (9.7%) Segment Adjusted EBITDA 206 200 (3.0%) Segment Adjusted EBITDA Margin % 58.0% 62.3%
Slide 16: Towers and Tenants
TOWERS AND TENANTS Towers (in ‘000s) Towers Built 1,329 BTS in 2023 39.7 39.1 39.3 39.7 40.1 438 1.5 1.5 1.5 1.7 1.7 415 12 18 7.3 7.3 7.4 7.7 8.0 356 23 81 278 13.9 14.0 14.1 10 321 13.9 13.9 294 68 198 7 175 29 50 17.0 16.4 16.4 16.4 16.4 184 48 51 112 77 45 54 26 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q2
Slide 17: Debt Profile
DEBT PROFILE Consolidated Net Leverage Ratio Debt and Net Leverage Debt Maturity Profile (3) as of Dec. 31, 2023 $M 3.4x $M As of Sept. 30, 2023 As of Dec. 31, 2023 8.000% Senior Notes due 2027 940 940 1,118 • Continue to target net leverage 5.625% Senior Notes due 2026 500 500 ratio of 3-4x 133 6.2
Slide 18: 2024 Guidance
2024 GUIDANCE Introducing 2024 Guidance Key Points Metrics Range Revenue Guidance • Implies organic growth of ~49% Revenue $1,700M - $1,730M (at the mid-point) • Excludes power pass-through revenue in South Africa (whereas 2023 included $17M in Adjusted EBITDA(1) $935M - $955M power pass-through rev
Slide 19: FX Overview
FX OVERVIEW Revenue by Reporting Currency (1) Revenue by Linked Contract Split 4Q23 FY23 4Q23 FY23 65% 11% (2) 9% 7% 63% 12% (2) 11% 7% 42% USD 40% USD NGN EUR BRL ZAR NGN EUR BRL ZAR (2) (2) 3% 3% 2% 10% EUR 10% EUR 3% 3% 2% ZMW RWF KWD ZMW RWF KWD 38% Local Currency 40% Local Currency 10% Power(3)
Slide 20: Indicative FY24 Naira Devaluation
INDICATIVE FY24 NAIRA DEVALUATION Key Points Rates assumed in guidance (NAFEM) Full Year 10% Naira Devaluation (1) • Average USD:NGN of 1,610 • Dec. 2024 USD:NGN of 1,850 Metrics Impact Range(2) Devaluation assumption • The numbers on this page represent an indicative FY impact Revenue ~($40M) to ~(
Slide 21: Appendix
APPENDIX IHS 21
Slide 22: FY23 Segment Performance Highlights
FY23 SEGMENT PERFORMANCE HIGHLIGHTS Revenue and segment Adjusted EBITDA in $M FY22 FY23 Y/Y Towers 16,995 16,395 (3.5%) Nigeria Tenants 26,210 26,009 (0.8%) Lease Amendments 30,218 33,999 12.5% Revenue 1,352 1,382 2.2% Segment Adjusted EBITDA 803 855 6.5% Segment Adjusted EBITDA Margin % 59.4% 61.9%
Slide 23: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS FX Resets and CPI Escalators offer effective revenue protection against the impact of currency devaluation USD FX Reset Frequency (1) 2023 CPI By Market (2) How FX resets work • A relevant portion of contracts is tied to a “hard currency” including USD and Euro • We
Slide 24: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS Power Solutions as at Dec 31, 2023 (1) Diesel $M Oil Impact • For the last several years, IHS 948 has added hybrid (solar/battery) 911 powered solutions. As part of our Carbon Reduction Roadmap, we expect to 819 continue to upgrade a portion 792 of towers in our portfolio,
Slide 25: 4Q23 Revenue Overview
4Q23 REVENUE OVERVIEW Our key customers consist of the largest MNOs in the markets where we operate 4Q23 Revenue by Key Customer 4Q23 Revenue by segment 58% MTN 17% Airtel 6% TIM 5% Orange 63% Nigeria 3% 9mobile 24% SSA 2% Zain 1% Claro 11% Latam 1% Vivo 2% MENA 1% Oi (Fixed) 1% Telkom <1% Tigo Cust
Slide 26: IHS Market Data
IHS MARKET DATA We are the leader in market share in 7 of the markets where we operate Country Towers (1) Towerco Market Position Towerco Market Share (2) Core Tenants (3) # out of # Major MNOs (4) Nigeria 16,395 1st 60% 3 out of 4 South Africa 5,691 1st 50% 2 out of 4 CIV 2,694 1st 100% 3 out of 3
Slide 27: IHS Markets Overview
IHS MARKETS OVERVIEW Attractive markets well suited for organic growth Population (million people) Data Usage Per SIM (GB/Month) CAGR 2022 – 2027E CAGR 2022 – 2027E 1.4% 2.3% 18.7% 25.7% 838 248 10.8 6.7 782 221 4.6 2.1 2022 2027E 2022 2027E 2022 2027E 2022 2027E All IHS Markets(1) Nigeria All IHS M
Slide 28: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 3-month period ended LTM as of LTM as of LTM as of ($000s) Dec 31, 2022(1) Mar 31, 2023 June 30, 2023(2) Sep 30, 2023(2) Dec 31, 2023 Dec 31, 2022(1) Sep 30, 2023(2) Dec 31, 2023 Profit/(Loss) (268,863
Slide 29: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 2019 2020 2021 2022(1) 2023 ($000s) Profit/(Loss) (423,492) (322,682) (26,121) (468,966) (1,988,178) Divided by total revenue 1,231,056 1,403,149 1,579,730 1,961,299 2,125,539 Profit/(Loss) margin (34%
Slide 30: Adjusted Levered Free Cash Flow Reconciliation
ADJUSTED LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of Cash From Operations for the period Adjusted Levered Free Cash Flow 3-month period ended ($000s) Dec 31, 2022 Mar 31, 2023 June 30, 2023(1) Sep 30, 2023(1) Dec 31, 2023 Cash from operations 289,277 251,859 259,098 229,912 162,054 Net m
Slide 31: Adjusted Levered Free Cash Flow Reconciliation
ADJUSTED LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of Cash from Operations for the period to Adjusted Levered Free Cash Flow 2022 2023 ($000s) Profit/(Loss) 966,874 902,923 Net movement in working capital 46,240 224,982 Income taxes paid (51,245) (45,411) Withholding tax (1) (116,147) (11
Slide 32: Reconciliation of Return on Invested Capital
RECONCILIATION OF RETURN ON INVESTED CAPITAL Reconciliation from profit/(loss) for the period to Adjusted EBITDA and Return on Invested Capital 2019 2020 2021(1) 2022(1) 2023 ($000s) Profit/(Loss) (423,492) (322,682) (26,121) (468,966) (1,988,178) Adjustments - - - - - Income tax expense 13,518 169,
Slide 33: Currency Overview
CURRENCY OVERVIEW Average Period End Spot Currency FY22 1Q23 2Q23 3Q23 4Q23 FY23 FY22 1Q23 2Q23 3Q23 4Q23 FY23 Nigeria (Naira) - USD:NGN NAFEX 428 461 508 768 815 638 462 461 753 776 912 912 European Union (Euro) - USD:EUR 0.95 0.93 0.92 0.92 0.93 0.92 0.94 0.92 0.92 0.95 0.91 0.91 Zambia (Kwatcha)
Slide 34: Glossary of Terms
GLOSSARY OF TERMS Adjusted EBITDA (including by segment): Profit/(loss) for the period, before income tax expense/(benefit), finance costs and income, depreciation and amortization, impairment of withholding tax receivables, business combination transaction costs, impairment of property, plant and e
Slide 35: Glossary of Terms
GLOSSARY OF TERMS LTM Pro Forma Adjusted EBITDA: Adjusted EBITDA for the applicable four consecutive fiscal quarters as further adjusted to give pro forma effect (as determined in good faith by management and may, with respect to acquisitions, include anticipated cost synergies and expense and cost
Slide 36: IHS Towers Investor Relations
IHS Towers Investor Relations investorrelations@ihstowers.com