Ihs Holding Limited · NYSE:IHS
Ihs — FY2022 Earnings Presentation
36 slides from Ihs's earnings presentation, Mar 28, 2023
Slide 1: 4Q/FY22 Earnings Results
4Q/FY22 Earnings Results March 28, 2023
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 & Executive Vice President of CFO Communications 3
Slide 4: IHS Growth Strategy
IHS GROWTH STRATEGY REVENUE In US$M Organic Growth of 19.5% Y/Y vs. Guidance of ~17% (at mid-point) 1,961 (2) 18 Revenue 1,580 (1) CAGR 2018 - 2022 1,403 24 1,168 1,231 +13.8% Organic Revenue • Capitalize on significant growth CAGR 2018 - 2022 opportunities in existing markets +15.2% • Optimize util
Slide 5: 4Q22 Performance
4Q22 PERFORMANCE REVENUE In US$M 521 526 (1) 18 468 4Q22 Revenue 446 Growth Y/Y 416 +26.6% 4Q22 Organic Revenue Growth Y/Y • 4Q22 revenue of $526M grew +26.6% (organic +23.5%) Y/Y +23.5% • 4Q22 Adjusted EBITDA of $273M (margin 51.8%) grew +25.9% Y/Y 4Q21 1Q22 2Q22 3Q22 4Q22 • 4Q22 RLFCF of $97M grew
Slide 6: IHS Group Snapshot
IHS GROUP SNAPSHOT 4th Largest Independent Multinational 39,652 TowerCo Globally By Tower Count (1) Towers on 3 Continents 223,055 (1) ~135,000 16,995 6,994 Nigeria Brazil ~41,500 39,652 39,342 5,691 2,699 South Africa Côte d’Ivoire 2,279 1,862 ~22,000 Cameroon Zambia 13,553 1,531 1,319 Kuwait Rwand
Slide 7: 2022 Highlights
2022 HIGHLIGHTS Latam South Africa Stock Liquidity • In March, acquired GTS SP5’s 2,115 towers in • In May, acquired MTN SA’s 5,691 towers and • In May, waived registered offering requirement for Brazil with a nationwide footprint signed a power Managed Services agreement Block A shares covering an
Slide 8: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY SUSTAINABILITY INITIATIVES IN 4Q22 OUR STRATEGY Ethics and governance Four-pillar Sustainability Strategy: • Conducted 47 Group-wide supplier audits in 2022 to assess • Ethics and governance continual compliance with IHS’ high standards of integrity • Environment and c
Slide 9: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT FY21 FY22 Y/Y 4Q21 4Q22 Y/Y Towers (#) 31,043 39,652 27.7% 31,043 39,652 27.7% Tenants (#) 46,414 58,573 26.2% 46,414 58,573 26.2% Colocation Rate 1.50x 1.48x (0.02x) 1.50x 1.48x (0.02x) Lease Amendments (#) 27,124 31,674 16.8% 27,124 31,674 16.8% In US$M, unless stated
Slide 10: FY22 Consolidated Revenue Walk
FY22 CONSOLIDATED REVENUE WALK FY22 REVENUE In US$M +19.5% Growth +$382M or +24.2% FY22 Organic Revenue Growth Rate Y/Y (77) 1,961 Organic Growth +$307M or +19.5% 151 • By Segment • Nigeria 27.3% 23.2% 19 (1) • SSA 9.2% 5.2% • Latam 31.6% 32.1% 79 • MENA 15.1% 14.0% 43 27 19 39 83 1,580 +5.2% +2.5%
Slide 11: 4Q22 Consolidated Revenue Walk
4Q22 CONSOLIDATED REVENUE WALK 4Q22 REVENUE In US$M +23.5% Growth +$111M or +26.6% 4Q22 Organic Revenue Growth Rate Y/Y (32) Organic Growth +$98M or +23.5% 45 • By Segment 526 • Nigeria 27.3% 5 (5) • SSA 9.2% • Latam 31.6% 37 • MENA 15.1% 12 8 4 13 23 416 +5.5% +3.1% +1.0% +2.0% +2.9% +8.9% +1.3% (1
Slide 12: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA REVENUE Reported Growth Y/Y +12.1% +23.4% +16.4% (1) +30.2% +26.6% +12.6% +24.2% +26.6% Organic +14.5% +21.5% +9.9% (1) +23.1% +23.5% +16.1% +19.5% 4Q22 Revenue Growth Rate Y/Y Growth Y/Y 1,961 • 4Q22 revenue grew +26.6% Y/Y, of 36 In US$M 1,580 160 which org
Slide 13: Recurring Levered Free Cash Flow and Capex
RECURRING LEVERED FREE CASH FLOW AND CAPEX RECURRING LEVERED FREE CASH FLOW In US$M $97M 43.8% 40.6% 35.2% 36.6% 35.7% 406 35.6% (2) 33.3% 61 (2) 363 (1) 4Q22 Recurring Levered 18 (2) (2) 91 97 Free Cash Flow 88 (1) 87 (2)88 (1) (1) (1) 18 • 4Q22 RLFCF grew +10.6% Y/Y • FY22 RLFCF decreased (10.6%)
Slide 14: ROIC and Capital Allocation
ROIC AND CAPITAL ALLOCATION ROIC (1) 12.4% 9.9% (2) 11.0% 9.7% 10.0% (2) 9.9% ROIC (1) as of December 31, 2022 (2) (2) (1) (2) (1) • Brazil’s GTS SP5 added in March 2022 • South Africa’s MTN added in 2018 2019 2020 2021 2022 May 2022 • Project Green capex in 2022 was FY22 CAPITAL ALLOCATION back-end
Slide 15: 4Q22 Segment Performance Highlights
4Q22 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Segment Adjusted EBITDA In US$M 4Q21 4Q22 Y/Y Towers 16,854 16,995 0.8% Tenants 25,621 26,210 2.3% Lease Amendments 26,334 30,218 14.7% Nigeria Revenue 300 355 18.5% Segment Adjusted EBITDA 184 206 12.1% Segment Adjusted EBITDA Margin % 61.3% 58.0% (330
Slide 16: Towers & Tenants
TOWERS & TENANTS TOWERS TOWERS BUILT In ‘000s 39.1 39.4 39.7 1.4 1.5 1.5 33.3 1,184 BTS in 2022 31.0 7.1 7.2 7.3 1.4 1.4 7.1 439 4.9 39 385 13.7 13.8 13.9 356 19 7.9 7.9 105 56 23 19 240 67 81 203 21 68 23 74 16.9 17.0 41 16.9 16.9 16.7 276 243 39 108 184 100 37 4Q21 1Q22 2Q22 3Q22 4Q22 4Q21 1Q22 2Q
Slide 17: Debt and Other Matters
DEBT AND OTHER MATTERS As of September As of December In US$M 30, 2022 31, 2022 8.000% Senior Notes due 2027 940 940 3.2x 5.625% Senior Notes due 2026 500 500 Consolidated Net Leverage Ratio as of December 31, 2022 6.250% Senior Notes due 2028 500 500 Nigeria (2019) term loan 298 191 • 8.6% weighted
Slide 18: 2023 Guidance
2023 GUIDANCE Key Points • Revenue guidance: • Includes ~$40M non-recurring cash receipt in 1Q23 from our smallest key INTRODUCING 2023 GUIDANCE customer in Nigeria • Implies organic growth of ~23% (at the Metrics Range mid-point) or 21% excluding the ~$40M non-recurring cash receipt • Includes ~$25
Slide 19: FX Overview
FX OVERVIEW REVENUE BY REPORTING CURRENCY (1) 4Q22 FY22 RWF KWD RWF KWD FX Rates ZMW 3% 2% ZMW 3% ZAR 4% 2% ZAR 4% 6% 4% Assumed in 2023 Guidance BRL BRL 8% • 2023 average rates (1) 8% (2) (2) • USD:NGN = 500 (2) (1) EUR (2) EUR (2) 11% • USD:BRL = 5.30 11% NGN NGN 68% 69% • USD:EUR = 0.95 • USD:ZMW
Slide 20: Indicative Full Year Naira Devaluation Sensitivity
INDICATIVE FULL YEAR NAIRA DEVALUATION SENSITIVITY Nigeria’s FX Environment • Our 2023 guidance assumes an FULL YEAR 10% NAIRA DEVALUATION (1) average USD:NGN NAFEX rate of 500 vs. 461 as of March 23, 2023 Metrics Impact (2) • The numbers on this page represent what would occur if the average rate w
Slide 21: Appendix
Appendix MHS | 2
Slide 22: FY22 Segment Performance Highlights
FY22 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Segment Adjusted EBITDA In US$M FY21 FY22 Y/Y Towers 16,854 16,995 0.8% Tenants 25,621 26,210 2.3% Lease Amendments 26,334 30,218 14.7% Nigeria Revenue 1,147 1,352 17.9% Segment Adjusted EBITDA 784 803 2.5% Segment Adjusted EBITDA Margin % 68.3% 59.4% (8
Slide 23: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS USD FX RESET FREQUENCY (1) Semi-annually 3% Annually 6% FX Resets Monthly 4% How FX resets work • A relevant portion of contracts is tied to a “hard currency” including USD and Euro • We are paid in local currency but, in certain countries, the absolute amount Quarte
Slide 24: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS (1) POWER SOLUTION AS AT DEC 31, 2022 Grid / Solar / other 7% Oil Impact Grid connectivity • For the last several years, IHS has and back up added hybrid (solar/battery) powered Hybrid generator 26% 42% solutions. As part of our Carbon Reduction Roadmap, we expect to conti
Slide 25: 4Q22 Revenue Overview
4Q22 REVENUE OVERVIEW 4Q22 REVENUE BY KEY CUSTOMERS 4Q22 REVENUE BY SEGMENT 1% 1% 1% 2% 1% <1% 2% 3% 4% 8% 4% 4% 22% 60% 19% 68% MTN Airtel Orange TIM(1) 9mobile Zain Claro Vivo Oi (Fixed) Telkom Tigo Other Nigeria SSA Latam MENA Customer Credit Rating(1) America Telefonica MTN Airtel Orange Millico
Slide 26: IHS Market Data
IHS MARKET DATA Towerco Towerco (1) Core # out of # Major Towers Market Market Tenants (4) MNOs (5) Position (2) Share (3) 1 Nigeria 16,995 59% 3 out of 4 1 South Africa 5,691 52% 2 out of 4 1 CIV 2,699 100% 3 out of 3 1 Cameroon 2,279 100% 2 out of 3 1 Zambia 1,862 59% 2 out of 3 Rwanda 1,319 1 100
Slide 27: Attractive Markets Well Suited for Organic Growth
ATTRACTIVE MARKETS WELL SUITED FOR ORGANIC GROWTH POPULATION (MILLION PEOPLE) DATA USAGE PER SIM (GB/MONTH) CAGR 2021 – 2026E CAGR 2021 – 2026E 1.4% 2.5% 23.0% 28.9% 9.8 5.3 824 242 767 214 3.5 1.5 2021 2026E 2021 2026E 2021 2026E 2021 2026E All IHS Markets (1) Nigeria All IHS Markets (2) Nigeria 4G
Slide 28: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from (loss)/profit for the period to Adjusted EBITDA 3-month period ended LTM as of LTM as of LTM as of Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, Dec 31, Sep 30, Dec 31, 2021 2022 2022 2022 2022 2021 2022 2022 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'00
Slide 29: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from (loss)/profit for the period to Adjusted EBITDA 2018 2019 2020 2021 2022 $'000 $'000 $'000 $'000 $'000 Loss (132,770) (423,492) (322,682) (26,121) (470,397) Adjustments: Income tax expense 46,748 13,518 169,829 17,980 (73,453) (1) Finance costs 315,
Slide 30: Recurring Levered Free Cash Flow Reconciliation
RECURRING LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to Recurring 3-month period ended Levered Free Cash Flow Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2021 2022 2022 2022 2022 $'000 $'000 $'000 $'000 $'000 Cash from operations 190,184 166,607 216,800 2
Slide 31: Recurring Levered Free Cash Flow Reconciliation
RECURRING LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to Recurring Levered Free Cash Flow 2018 2019 2020 2021 2022 $'000 $'000 $'000 $'000 $'000 Cash from operations 554,940 660,025 656,699 788,073 966,874 Net movement in working capital 67,067 18,133
Slide 32: ROIC Reconciliation
ROIC RECONCILIATION Reconciliation of Return on Invested Capital 2018 2019 2020 2021 2022 $'000 $'000 $'000 $'000 $'000 (Loss)/profit (132,770) (423,492) (322,682) (26,121) (470,397) Adjustments: Income tax expense 46,748 13,518 169,829 17,980 (73,453) Finance costs (1) ( 315,942 288,915 633,766 422
Slide 33: Currency Overview
CURRENCY OVERVIEW Average Period End Spot Currency FY21 1Q22 2Q22 3Q22 4Q22 FY22 FY21 1Q22 2Q22 3Q22 4Q22 FY22 Nigeria (Naira) – USD:NGN NAFEX 410 417 419 431 446 428 435 417 425 437 462 462 European Union (Euro) – USD:EUR 0.85 0.89 0.94 0.99 0.98 0.95 0.88 0.90 0.95 1.04 0.94 0.94 Zambia (Kwacha) –
Slide 34: Glossary of Terms
GLOSSARY OF TERMS Adjusted EBITDA: 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 equipment and related pr
Slide 35: Glossary of Terms
GLOSSARY OF TERMS Non-core Revenue: Non-core captures the impact of movements in foreign exchange rates on the translation of the results of our local operations from their local functional currency into U.S. dollars, which is measured by the difference in U.S. dollars between (i) revenue in local c
Slide 36: Towers of strength
Towers of strength instowers.com