Ihs Holding Limited · NYSE:IHS
Ihs — Q3 2022 Earnings Presentation
32 slides from Ihs's earnings presentation, Nov 15, 2022
Slide 1: 3Q22 Earnings Results
3Q22 Earnings Results November 15, 2022
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 & Senior Vice President of CFO Communications 3
Slide 4: IHS Growth Strategy
IHS GROWTH STRATEGY REVENUE In US$M 1,580 (1) 1,403 24 1,231 Revenue 1,107 1,168 CAGR 2017 - 2021 +9.3% Organic Revenue • Capitalize on significant growth CAGR 2017 - 2021 (2) opportunities in existing markets +15.2% • Optimize utilization of existing assets 2017A 2018A 2019A 2020A 2021A • Consolida
Slide 5: 3Q22 Performance and Recent Developments
3Q22 PERFORMANCE AND RECENT DEVELOPMENTS REVENUE In US$M 521 (1) 18 3Q22 Revenue 468 446 Growth Y/Y 416 +30.2% 401 3Q22 Organic Revenue 503 Growth Y/Y • In 3Q22, constructed 385 new towers and added 512 new tenants +23.1% • 3Q22 revenue of $521M grew +30.2% (organic +23.1%) Y/Y, and 25.7% Y/Y 3Q21 4
Slide 6: IHS Group Snapshot
IHS GROUP SNAPSHOT 3rd Largest Independent Multinational 39,397 TowerCo Globally By Tower Count (1) Towers on 3 Continents (1) 221,132 ~138,000 16,906 6,915 Nigeria Brazil 39,397 39,185 5,691 2,700 South Africa Côte d’Ivoire ~22,000 2,264 1,832 Cameroon Zambia 14,221 1,508 1,301 Kuwait Rwanda 228 52
Slide 7: Carbon Reduction Roadmap
CARBON REDUCTION ROADMAP Our Carbon Reduction Roadmap goal is to decrease Scope 1 and Scope 2 kWh emissions intensity by ~50% by 2030. For Project Green we expect to spend approximately $214M in capex and to deliver $77M in RLFCF savings by 2025 and a 30% IRR on the overall project. CARBON REDUCTION
Slide 8: Strategic Update
STRATEGIC UPDATE Balance Sheet Stock Liquidity • Prudently managing balance sheet; leverage of 3.1x is at the • Trailing 90-day ADTV has increased to 337K shares as of low-end of the 3-4x target November 11, 2022 from 122K shares as of May 17, 2022 • In October, entered new $600M Three-Year Bullet-T
Slide 9: Sustainability Is Our Business Model
SUSTAINABILITY IS OUR BUSINESS MODEL SUSTAINABILITY INITIATIVES IN 3Q22 OUR STRATEGY Ethics and governance Carbon Reduction Roadmap LINK • IHS Zambia delivered supplier training on “Promoting Ethics, • Published October 24, 2022 Compliance and Sustainable Business Partnerships” in partnership with t
Slide 10: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT 3Q21 3Q22 Y/Y Towers (#) 30,519 39,397 29.1% Tenants (#) 46,045 57,893 25.7% Colocation Rate 1.51x 1.47x (0.04x) (1) Lease Amendments (#) 26,419 30,169 14.2% In US$M, unless stated Revenue 401 521 30.2% Adjusted EBITDA 220 275 25.0% Adjusted EBITDA Margin 54.9% 52.7% (2
Slide 11: 3Q22 Consolidated Revenue Walk
3Q22 CONSOLIDATED REVENUE WALK 3Q REVENUE +23.1% In US$M Growth +$121M or +30.2% 3Q22 Organic Inorganic Revenue Growth Growth +13.1% Rate Y/Y Organic Growth +$92M or +23.1% • By Segment (24) 521 • Nigeria 28.7% 52 • SSA 3.1% • Latam 36.1% • MENA 16.2% 21 5 22 8 7 4 7 20 401 +5.1% +1.7% +0.9% +1.7% +
Slide 12: 3Q22 Segment Performance Highlights
3Q22 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Adjusted EBITDA In US$M 3Q21 3Q22 Y/Y Towers 16,618 16,906 1.7% Tenants 25,260 25,861 2.4% (1) Lease Amendments 25,464 29,084 14.2% Nigeria Revenue 289 355 22.9% Adjusted EBITDA 179 210 17.0% Adjusted EBITDA Margin % 62.1% 59.1% (300 Bps) Towers 7,860 13
Slide 13: Towers & Tenants
TOWERS & TENANTS TOWERS TOWERS BUILT In ‘000s 39.1 39.4 1.4 1.5 33.3 30.5 31.0 7.1 7.2 1.4 1.2 1.4 439 4.9 7.1 4.8 385 39 13.7 13.8 320 19 7.9 7.9 7.9 105 56 8 240 19 67 203 175 21 23 74 41 16.6 16.9 16.9 16.7 16.9 276 39 243 39 108 98 100 37 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Nigeria
Slide 14: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA REVENUE Reported (1) Growth Y/Y +8.7% +12.1% +23.4% +16.4% (1) +30.2% +30.2% Organic Growth Y/Y +11.8% +14.5% +21.5% +9.9% +23.1% 3Q22 Revenue Growth Rate Y/Y In US$M 521 446 468 9 401 416 9 42 • 3Q22 revenue grew +30.2% Y/Y, of 7 31 9 43 20 8 115 (2) 15 89 8
Slide 15: Recurring Levered Free Cash Flow and Capex
RECURRING LEVERED FREE CASH FLOW AND CAPEX RECURRING LEVERED FREE CASH FLOW In US$M $91M 40.6% 36.6% 33.5% (2) 35.6% 33.3% 3Q22 Recurring Levered (2) (2) 88 87 88 91 Free Cash Flow 74 (1) (2) 18 (1)(1) • 3Q22 RLFCF grew +24.2% Y/Y, and 73 (0.3%) Y/Y excluding $18M of non- recurring revenue in 3Q22 3
Slide 16: Debt and Other Matters
DEBT AND OTHER MATTERS As of June 30, As of September In US$M 2022 30, 2022 3.1x 8.000% Senior Notes due 2027 940 940 5.625% Senior Notes due 2026 500 500 6.250% Senior Notes due 2028 500 500 Consolidated Net Leverage Ratio as of September 30, 2022 Nigeria Senior Credit Facilities 332 298 Other Inde
Slide 17: 2022 Guidance
2022 GUIDANCE Key Points • Raise revenue guidance by +$20M at mid-point to $1,905M - $1,925M; implies organic growth of ~17% (from ~15% previously) • Raise Adjusted EBITDA guidance by +$10M at mid-point to $1,015M - 2022 GUIDANCE $1,035M (53.5% margin at mid-point) Previous Range • Raise RLFCF guida
Slide 18: FX Overview
FX OVERVIEW 3Q22 REVENUE BY REPORTING CURRENCY (1) RWF KWD ZMW ZAR 3% 3% 2% FX Rates 6% Assumed in 2022 Guidance BRL 8% • 2022 average rates (1) (2) (2) • USD:NGN = 428 EUR (2) (1) 10% • USD:BRL = 5.17 NGN 68% • USD:EUR = 0.96 • USD:ZMW = 16.83 • USD:RWF = 1,031 • USD:KWD = 0.31 • USD:COP = 4,166 3Q
Slide 19: Appendix
Appendix 19
Slide 20: 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 • Relevant for portion of contracts tied to “hard currency” such as USD or Euro • We are paid in local currency, but absolute amount adjusts based on the Quarterly hard cu
Slide 21: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS (1) POWER SOLUTION AS AT DEC 31, 2021 Grid / Solar / other 7% Oil Impact Grid connectivity • For the last several years, IHS has and back up Hybrid added hybrid (solar/battery) powered generator 42% solutions. As part of our Carbon 24% Reduction Roadmap, we expect to conti
Slide 22: Revenue Overview
REVENUE OVERVIEW 3Q22 REVENUE BY KEY CUSTOMERS(1) 3Q22 REVENUE BY SEGMENT 1% 1% 1% 2% 2% 4% 3% 4% 8% 4% 22% 17% 63% 68% (1) MTN Airtel Orange TIM 9mobile Zain Claro Vivo Oi (Fixe d) Other Nigeria SSA Latam ME NA Custom er Credit Rating (2) MTN Airtel Orange TIM 9Mobile Zain Claro Vivo Oi (Fixed) (2)
Slide 23: IHS Market Data
IHS MARKET DATA Towerco Towerco Core # out of # Major Towers (1) Market Market Tenants (3) MNOs (4) Position Share (2) Nigeria 16,906 1 59% 3 out of 4 South Africa 5,691 1 52% 2 out of 4 CIV 2,700 1 100% 3 out of 3 Cameroon 2,264 1 100% 2 out of 3 Zambia 1,832 1 59% 2 out of 3 Rwanda 1,301 1 100% 2
Slide 24: 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 25: 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 Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Sep 31, Jun 30, Sep 30, 2021 2021 2022 2022 2022 2021 2022 2022 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'00
Slide 26: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from (loss)/profit for the period to Adjusted EBITDA 2017 2018 2019 2020 2021 $'000 $'000 $'000 $'000 $'000 Loss (421,538) (132,770) (423,492) (322,682) (26,121) Adjustments: Income tax expense 25,130 46,748 13,518 169,829 17,980 Finance costs (1) 645,65
Slide 27: Recurring Levered Free Cash Flow Reconciliation
RECURRING LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to 3-m onth period ended Recurring Levered Free Cash Flow Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, 2021 2021 2022 2022 2022 $'000 $'000 $'000 $'000 $'000 Cash from operations 205,672 190,184 166,607
Slide 28: 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 2017 2018 2019 2020 2021 $'000 $'000 $'000 $'000 $'000 Cash from operations 536,964 554,940 660,025 656,699 788,073 Net movement in working capital 51,072 67,067
Slide 29: Currency Overview
CURRENCY OVERVIEW Average Period End Spot Currency 2020A 3Q21 4Q21 1Q22 2Q22 3Q22 2020A 3Q21 4Q21 1Q22 2Q22 3Q22 Nigeria (Naira) – USD:NGN NAFEX 382 412 415 417 419 431 410 415 435 417 425 437 European Union (Euro) – USD:EUR 0.88 0.85 0.87 0.89 0.94 0.99 0.82 0.86 0.88 0.90 0.95 1.04 Zambia (Kwacha)
Slide 30: 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 31: Glossary of Terms
GLOSSARY OF TERMS MENA: Our Middle East and North Africa segment which comprises our operations in Egypt and Kuwait. Although full operations in Egypt have not commenced, the business has incurred some startup costs. Net Debt: Gross debt less cash and cash equivalents at a stated statement of financ
Slide 32: ihstowers.com
Towers of strength ihstowers.com