Ihs Holding Limited · NYSE:IHS
Ihs — Q3 2023 Earnings Presentation
30 slides from Ihs's earnings presentation, Nov 14, 2023
Slide 1: 3Q23 Earnings Results
3Q23 Earnings Results November 14, 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 DARW ISH STEVE HOW DEN COLBY SYNESAEL Chairman & CEO Executive Vice President & Executive Vice President of CFO Communications 3
Slide 4: IHS Track Record
IHS TRACK RECORD REVENUE In US$M 1,961 (2) 18 Revenue 1,580 (1) CAGR 2018 - 2022 1,403 24 1,231 +13.8% 1,168 Organic Revenue CAGR 2018 - 2022 • Capitalize on significant growth +15.2% opportunities in existing markets • Optimize utilization of existing assets 2018 2019 2020 2021 2022 • Consolidate t
Slide 5: 3Q23 Performance
3Q23 PERFORMANCE REVENUE In US$M 603 (2) 48 546 521 526 3Q23 Revenue (1) Growth Y/Y 18 467 (10.4%) • 3Q23 revenue of $467M decreased 3Q23 Organic Revenue (10.4%) (organic +30.6%) Y/Y driven Growth Y/Y primarily by the significant devaluation of +30.6% the Naira • NGN:USD devalued by 78%, from 431 in
Slide 6: IHS Group Snapshot
IHS GROUP SNAPSHOT 5th Largest Independent Multinational 39,739 TowerCo Globally By Tower Count (1) 222,858 Towers on 3 Continents (1) 129,206 16,400 7,388 Nigeria Brazil ~41,500 39,761 39,739 5,691 2,694 South Africa Côte d’Ivoire 2,347 1,879 ~23,000 Cameroon Zambia 14,024 1,661 1,394 Kuwait Rwanda
Slide 7: 3Q23 Highlights
3Q23 HIGHLIGHTS Nigeria Brazil South Africa • In September, a new governor of the central bank was appointed • Continue to see solid demand driven in part by the strategic • IHS is the #1 independent TowerCo in South Africa by positioning we have built as a leading infraco tower count • Upstreaming
Slide 8: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY SUSTAINABILITY INITIATIVES IN 3Q23 OUR STRATEGY Ethics and governance Four-pillar Sustainability Strategy: • IHS Nigeria and the Telecommunication and Technology • Ethics and governance Sustainability Working Group (TTSWG) announced their flagship • Environment and cli
Slide 9: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT 3Q22 3Q23 Y/Y Tow ers (#) 39,397 39,739 0.9% Tenants (#) 57,893 59,196 2.3% Colocation Rate 1.47x 1.49x 0.02x Lease Am endm ents (#) 30,169 35,254 16.9% In US$M, unless stated Revenue 521 467 (10.4%) (1) Adjusted EBITDA 274 232 (15.5%) Adjusted EBITDA Margin 52.6% 49.7%
Slide 10: 3Q23 Consolidated Revenue Walk
3Q23 CONSOLIDATED REVENUE WALK 3Q23 REVENUE In US$M +30.6% Growth ($54M) or (10.4%) 3Q23 Organic Revenue Growth Rate Y/Y Organic Growth +$160M or +30.6% • By Segment 7 (0) 1 12 5 • Nigeria 36.3% 6 6 • SSA 20.7% • Latam 14.8% 87 • MENA 7.4% (215) • The Naira devaluation 521 37 accounts for 99% of the
Slide 11: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA REVENUE (1) Reported Growth Y/Y +30.2% +26.6% +35.1% +16.8% (10.4%) (10.4%) Organic +38.0% Growth Y/Y +23.1% +23.5% +29.7% +30.6% 3Q23 Revenue Growth Rate Y/Y 603 In US$M 10 546 521 526 46 9 10 48 10 467 • 3Q23 revenue decreased (10.4%) Y/Y, 42 44 122 115 (1)
Slide 12: Adjusted Levered Free Cash Flow and Capex
ADJUSTED LEVERED FREE CASH FLOW AND CAPEX ADJUSTED LEVERED FREE CASH FLOW (1) In US$M 46.2% $80M 32.7% 35.6% 155 30.6% 34.3% 3Q23 Adjusted Levered Free Cash Flow (3) 43 (2) 90 (1) 97 93 (2) 80 18 • 3Q23 ALFCF decreased (11.2%) Y/Y • 3Q23 Capex decreased (39.5%) Y/Y 3Q22 4Q22 1Q23 2Q23 3Q23 driven la
Slide 13: 3Q23 Segment Performance Highlights
3Q23 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Segment Adjusted EBITDA In US$M 3Q22 3Q23 Y/Y Tow ers 16,906 16,400 (3.0%) Tenants 25,861 25,927 0.3% Lease Amendments 29,084 33,254 14.3% Nigeria Revenue 355 271 (23.6%) Segment Adjusted EBITDA 210 158 (24.8%) Segment Adjusted EBITDA Margin % 59.1% 58.2
Slide 14: Towers & Tenants
TOWERS & TENANTS TOWERS TOWERS BUILT In ‘000s 39.4 39.7 39.1 39.3 39.7 1.5 1.5 1.5 1.5 1.7 7.2 7.3 7.3 7.4 7.7 415 385 356 18 13.8 13.9 19 13.9 13.9 14.0 56 23 278 67 81 10 198 294 68 7 175 29 16.9 17.0 16.4 16.4 16.4 243 50 184 112 48 77 45 26 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Niger
Slide 15: Debt and Other Matters
DEBT AND OTHER MATTERS As of June 30, As of September In US$M 2023 30, 2023 8.000% Senior Notes due 2027 940 940 3.2x 5.625% Senior Notes due 2026 500 500 Consolidated Net Leverage Ratio 6.250% Senior Notes due 2028 500 500 as of September 30, 2023 Other Indebtedness (1) 2,119 2,196 • 9.6% weighted
Slide 16: 2023 Guidance
2023 GUIDANCE Key Points • Maintain Revenue, Adjusted EBITDA and Capex guidance • Guidance now assumes an average rate of the Naira in 4Q23 of 775 vs. previously 750. Combined with the 2023 GUIDANCE modest upside to FX in 3Q23 vs. expectations, changes in our FX assumptions since last quarter Previo
Slide 17: FX Overview
FX OVERVIEW 3Q23 REVENUE BY REPORTING CURRENCY (1) KWD RWF ZMW 4% 3% 2% FX Rates ZAR 8% Assumed in 2023 Guidance • 2023 average rates BRL 11% • USD:NGN = 628 (2)(2) NGN 58% • USD:BRL = 5.01 EUR (2) • USD:EUR = 0.93 14% • USD:ZMW = 19.73 • USD:RWF = 1,157 • USD:KWD = 0.31 • USD:COP = 4,386 3Q23 REVEN
Slide 18: Appendix
Appendix MHS |
Slide 19: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS USD FX RESET FREQUENCY (1) Monthly Semi-annually 2% FX Resets 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 Quarterly adjusts
Slide 20: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS POWER SOLUTION AS AT DECEMBER 31, 2022 (1) Grid / Solar / other 7% Oil Impact Grid connectivity and back up • For the last several years, IHS has Hybrid generator 42% added hybrid (solar/battery) powered 26% solutions. As part of our Carbon Reduction Roadmap, we expect to
Slide 21: 3Q23 Revenue Overview
3Q23 REVENUE OVERVIEW 3Q23 REVENUE BY KEY CUSTOMERS 3Q23 REVENUE BY SEGMENT 1% 1% 1% <1% 2% 2% 2% 3% 2% 11% 5% 6% 14% 63% 58% 29% MTN Airtel TIM Orange Zain Claro Nigeria SSA Latam MENA Vivo Oi (Fixed) 9mobile Telkom Tigo Other (1) Customer Credit Rating America Telefonica MTN Airtel Orange Millicom
Slide 22: IHS Market Data
IHS MARKET DATA Towerco Towerco (1) Core # out of # Major Towers Market Market Tenants (3) MNOs (4) Position Share (2) 1 Nigeria 16,400 60% 3 out of 4 1 South Africa 5,691 50% 2 out of 4 1 CIV 2,694 100% 3 out of 3 1 Cameroon 2,347 100% 2 out of 3 1 Zambia 1,879 100% 2 out of 3 Rwanda 1,394 1 99% 2
Slide 23: Attractive Markets Well Suited for Organic Growth
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% 838 782 10.8 6.7 248 221 4.6 2.1 2022 2027E 2022 2027E 2022 2027E 2022 2027E All IHS Markets (1) Nigeria All IHS Markets (2) Nigeria 4
Slide 24: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 3-m onth period ended (1) LTM as of LTM as of LTM as of Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Sep 30, Jun 30, Sep 30, 2022 2022 2023 2023 2023 2022 2023 2023 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Slide 25: 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) (468,960) Adjustments: Income tax expense 46,748 13,518 169,829 17,980 (75,015) (1) 315,942 288,915 63
Slide 26: Adjusted Levered Free Cash Flow Reconciliation
ADJUSTED LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to Adjusted 3-m onth period ended (1) 9-Month Period Ended Levered Free Cash Flow Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Sep 30, Sep 30, 2022 2022 2023 2023 2023 2022 2023 $'000 $'000 $'000 $'000 $'
Slide 27: Currency Overview
CURRENCY OVERVIEW Average Period End Spot Currency FY21 3Q22 4Q22 1Q23 2Q23 3Q23 FY21 3Q22 4Q22 1Q23 2Q23 3Q23 Nigeria (Naira) – USD:NGN NAFEX 410 431 446 461 508 768 435 437 462 461 753 776 European Union (Euro) – USD:EUR 0.85 0.99 0.98 0.93 0.92 0.92 0.88 1.04 0.94 0.92 0.92 0.95 Zambia (Kwacha) –
Slide 28: 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 29: 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 30: Towers of strength
Towers of strength instowers.com