Ihs Holding Limited · NYSE:IHS
Ihs — IHS Towers — Q2 2024 Earnings Presentation
53 slides from Ihs's earnings presentation, August 2024
Slide 1: IHS Towers 2Q24 Company Presentation
IHS TOWERS 2Q24 COMPANY PRESENTATION | AUGUST 2024 Towers of strength
Slide 2: Disclaimer: Forward-Looking Information
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: Introduction
INTRODUCTION IHS 3
Slide 4: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS Structurally strong business model with long-term contracts providing visibility Leading independent multinational TowerCo focused on Emerging Markets - #1 in Africa and leading InfraCo in Brazil Highly attractive markets well-suited for organic growth Long track record for
Slide 5: A Unique & Compelling Investment Proposition
A UNIQUE & COMPELLING INVESTMENT PROPOSITION SCALE 40,000+ (1) #1 TowerCo (2) +754M (3) ~230,000 (2)(4) Towers In 7 of 10 Population in Incremental PoS forecast markets our 10 markets in next 5 years (2023-2028) FINANCIAL STRENGTH $1.8B (5) $948M (5)(6) 3.9x (1) 51.8% (5)(6) Consolidated Adjusted Co
Slide 6: IHS Global Tower Portfolio
IHS GLOBAL TOWER PORTFOLIO In 2Q24, we built +207 towers including +136 in Brazil 40,332 3rd Largest Towers on 3 Continents (1) Independent Multinational TowerCo Globally By Tower Count (1) Egypt(2) - 222,415 Africa and the Middle East Kuwait 1,676 Nigeria 16,345 113,216 Cameroon 2,419 Rwanda 1,443
Slide 7: All IHS-MTN Tower MLAs Renewed and Extended
ALL IHS-MTN TOWER MLAs RENEWED AND EXTENDED • Total MTN Tenancies: 13,440 | Expire Dec. 2032 Nigeria(1) • Total IHS Tenancies: 25,126 • Total MTN Tenancies: 1,942 | Expire Mar. 2033 Cameroon • Total IHS Tenancies: 3,834 • Total MTN Tenancies: 1,285 | Expire Apr. 2034 Rwanda • Total IHS Tenancies: 2,
Slide 8: Financial Overview
FINANCIAL OVERVIEW Attractive Revenue and Adjusted EBITDA growth over the last five years Revenue Adjusted EBITDA(4)(5) $M $M 2,126 (3) 1,961 48 1,133 (2) 1,031 18 (2) 48 (3) 1,580 926 18 (1) 1,403 24 819 61 (6) 1,231 +14.6% 669 Revenue CAGR 2019-2023 +14.1% Adjusted EBITDA CAGR 2019-2023 2019 2020
Slide 9: Business Growth History
BUSINESS GROWTH HISTORY IHS has a +22-year track record of successful growth Tower Builder Managed Services Specialist Tower Ownership & Colocation Africa Scale & Leadership Global Emerging Market Leader Established in #1 Independent Tower Nigeria in 2001 Company in Africa Global Expansion – Launch
Slide 10: Management Team
MANAGEMENT TEAM Founder-led management team with 125+ combined years of relevant experience X Years of experience Sam Darwish William Saad 25+ Mohamad Darwish 20+ 25+ Chairman & Group CEO EVP & COO EVP & CEO (Nigeria) • Co-founded IHS Towers in 2001 • Co-founded IHS Towers in 2001 • Co-founded IHS T
Slide 11: Board of Directors
BOARD OF DIRECTORS Global, experienced, and diverse board of directors; 89% independent Independent Board Members X Years of experience Board Members Sam Darwish 25+ Frank Dangeard 35+ Nick Land(1) 45+ Co-founder, Chairman & Group CEO Former Chairman and CEO of Thomson (2004 Former Executive Chairma
Slide 12: Business Model
BUSINESS MODEL IHS te
Slide 13: "DM Like" Business Model in Emerging Markets
“DM LIKE” BUSINESS MODEL IN EMERGING MARKETS Developed market operating model with exception of FX impacts Africa Middle East Latam US Model Long-term Contracts Limited Termination Rights Proxy of US$ contracts: (1) Annual Escalators (2) FX Resets N/A Amendment Revenue Negligible Multi-Tenant Discou
Slide 14: High Quality, Long-Term Contracts Generating Consistent Cash Flow
IHS TOWERS STRUCTURES HIGH QUALITY, LONG-TERM CONTRACTS, WHICH GENERATE CONSISTENT, LONG-TERM CASH FLOW Significant operating leverage realized from colocation and lease amendments helps accelerate cash flow 1 Long-term Contracts Provide Certainty & Visibility 2 USD/EUR Linked Contracts with Annual
Slide 15: Updated and De-Risked Power Exposure
UPDATED AND DE-RISKED POWER EXPOSURE Illustrative Revenue by Linked Contract Split after Power Exposure by Country renewal of all contracts with MTN Nigeria Country Power Indexation Power Pass-Through 46% USD Nigeria Actual 2Q24 Contract Split 12% EUR Brazil 9% Power 33% Local Currency South Africa(
Slide 16: Significant Operating Leverage
SIGNIFICANT OPERATING LEVERAGE Significant operating leverage realized from colocation and lease amendments helps accelerate cash flow 4 Strong Economic Units 5 Growing Use Fees Through Lease Amendments UNIT ECONOMICS – GROSS MARGIN ($000s)(1) AMENDMENT REVENUE – OPPORTUNITY(2) 60-65% 1. Tenant (0.5
Slide 17: 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 18: 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 has added hybrid (solar/battery) powered solutions. As part of 911 our Carbon Reduction Roadmap, we expect to 813 continue to upgrade a portion 792 of towers in our portfolio, 766
Slide 19: Proven, Disciplined M&A Approach
PROVEN, DISCIPLINED M&A APPROACH +32,500 towers acquired in 22 transactions in 3 regions and 10 countries(1) Market Attractiveness Framework (2) Strategic Importance of Investment to IHS Nigeria SSA Kuwait Latam Towers Investment Total Deals 6 10 1 5 Appraisal Framework (3) Total towers acquired 12,
Slide 20: 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 16,345 1st 64% 3 out of 4 South Africa 5,691 1st 50% 2 out of 4 Côte d’Ivoire 2,686 1st 100% 3
Slide 21: IHS Markets Overview
IHS MARKETS OVERVIEW Attractive markets well suited for organic growth Population (million people) Data Usage Per SIM (GB/Month) CAGR 2023 – 2028E CAGR 2023 – 2028E 1.4% 2.3% 17.2% 22.1% 809 254 12.8 7.8 754 226 5.8 2.9 2023 2028E 2023 2028E 2023 2028E 2023 2028E All IHS Markets(1) Nigeria All IHS M
Slide 22: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY Sustainability Initiatives in 2Q24 Our Strategy Four-pillar Sustainability Strategy • Ethics and governance Ethics and Environment and Education and Our people and • Environment and climate change • Education and economic growth governance climate change economic growt
Slide 23: 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 $217M in capex between 2022 and 2024, and to deliver $77M in ALFCF savings by 2025, a 30% IRR on the overall proje
Slide 24: Financial Performance
FINANCIAL PERFORMANCE IHS 4
Slide 25: 2Q24 Consolidated Revenue Walk
2Q24 CONSOLIDATED REVENUE WALK 2Q24 Revenue $M Total Growth Total Growth ($111M) or (20.3%) Organic Growth +$379M or +69.3% (20.3%) ($111M) Organic Growth 0.5 (44) +69.3% +$379M Organic Growth 546 by Segment 435 +105.1% Nigeria (4.7%) SSA +1.5% Latam 6.1% 58.8% 0.8% 1.9% 2.6% 4.3% 2.9% (8.0%) 0.1% (
Slide 26: 2Q24 Revenue Overview
2Q24 REVENUE OVERVIEW Our key customers consist of the largest MNOs in the markets where we operate 2Q24 Revenue by Key Customer 2Q24 Revenue by segment 61% MTN 15% Airtel 7% TIM 6% Orange 62% Nigeria 3% Zain 25% SSA 2% Claro 2% Vivo 11% Latam 1% Telkom 3% MENA <1% 9mobile <1% Tigo <1% Oi (Fixed) Cu
Slide 27: Revenue and Adjusted EBITDA
REVENUE AND ADJUSTED EBITDA Annual Revenue Quarterly Revenue +14.6% $M CAGR 2019-2023 $M 2,126 546 1,961 41 36 200 510 160 10 467 1,580 48 11 503 54 418 435 1,403 29 413 10 22 (2) (3) 123 52 11 11 1,231 344 60 18 48 124 48 46 30 (1) 313 24 133 108 305 131 1,352 1,334 1,382 1,334 365 1,038 1,147 1,12
Slide 28: Adjusted Levered Free Cash Flow and Capex
ADJUSTED LEVERED FREE CASH FLOW AND CAPEX Annual Adjusted Levered Free Cash Flow(1) Quarterly Adjusted Levered Free Cash Flow(1) $M 433 (3) $M 43(3) 43 118 363 (2) 18 86 74 67 43 (4) 2022 2023 (4) 2Q23 3Q23 4Q23 1Q24 2Q24 ALFCF Cash Conversion Rate +35.2% +38.2% +26.0% +36.0% +43.1% +23.3% +26.7% An
Slide 29: Debt Profile
DEBT PROFILE Consolidated Net Leverage Ratio Debt and Net Leverage Debt Maturity Profile (2) as of June 30, 2024 $M 3.9x $M As of Mar. 31, 2024 As of June 30, 2024 8.000% Senior Notes due 2027 940 940 1,114 • Continue to target net leverage 5.625% Senior Notes due 2026 500 500 ratio of 3-4x 147 6.25
Slide 30: 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 n
Slide 31: Key Performance Indicators
KEY PERFORMANCE INDICATORS 31
Slide 32: IHS Towers Key Performance Indicators
IHS TOWERS KEY PERFORMANCE INDICATORS Towers – Annual +13.6% Towers – Quarterly 2019-2023 CAGR 40,278 40,332 40,075(1) 40,075 39,652 31,043 39,739 27,807 24,076 39,298 2019 2020 2021 2022 2023 2Q23 3Q23 4Q23 1Q24 2Q24 Tenants – Annual +12.2% Tenants – Quarterly 2019-2023 CAGR 60,382 (1) 59,727 59,99
Slide 33: IHS Towers Key Performance Indicators
IHS TOWERS KEY PERFORMANCE INDICATORS Lease Amendments – Annual +28.1% Lease Amendments – Quarterly 2019-2023 CAGR 36,603 38,692 31,674(1) 37,126 27,124 36,603 17,983 35,254 13,604 34,234 2019 2020 2021 2022 2023 2Q23 3Q23 4Q23 1Q24 2Q24 Lease Lease amendments 3,621 4,379 9,141 4,550 (1) 4,929 amend
Slide 34: Markets
MARKETS IHS a
Slide 35: Nigeria
NIGERIA Entered Market in 2001 | #1 Independent TowerCo | 16,345 Towers (as of 2Q24) Nigeria is the 3rd largest country in Africa by GDP(1). The country has a population of 226 million and is expected to grow to 254 million by 2028. Nigeria’s real GDP is expected to grow at a 3.2% CAGR over the next
Slide 36: South Africa
SOUTH AFRICA Entered Market in 2022 | #1 Independent TowerCo | 5,691 Towers (as of 2Q24) South Africa is the 2nd largest country in Africa by GDP(1). The country has a population of 61 million and is expected to grow to 64 million by 2028. South Africa’s real GDP is expected to grow at 1.5% CAGR ove
Slide 37: Cameroon
CAMEROON Entered Market in 2013 | #1 Independent TowerCo | 2,419 Towers (as of 2Q24) Cameroon is the 15th largest country in Africa by GDP(1). The country has a population of 29 million and is expected to grow to 33 million by 2028. Cameroon’s real GDP is projected to grow at a 4.4% CAGR over the ne
Slide 38: Côte d'Ivoire
CÔTE D’IVOIRE Entered Market in 2013 | #1 Independent TowerCo | 2,686 Towers (as of 2Q24) Côte d’Ivoire is the 9th largest country in Africa by GDP(1). The country has a population of 29 million and is expected to grow to 33 million by 2028. Côte d’Ivoire’s real GDP is projected to grow at a 3.9% CA
Slide 39: Rwanda
RWANDA Entered Market in 2014 | #1 Independent TowerCo | 1,443 Towers (as of 2Q24) Rwanda is the 33rd largest country in Africa by GDP(1). The country has a population of 14 million and is expected to grow to 16 million by 2028. Rwanda’s real GDP is projected to grow at a 7.2% CAGR over the next fiv
Slide 40: Zambia
ZAMBIA Entered Market in 2014 | #1 Independent TowerCo | 1,878 Towers (as of 2Q24) Zambia is the 19th largest country in Africa by GDP(1). The country has a population of 21 million and is expected to grow to 24 million by 2028. Zambia’s real GDP is expected to grow at 4.7% CAGR over the next five y
Slide 41: Brazil
BRAZIL Entered Market in 2020 | #4 Independent TowerCo | 7,951 Towers (as of 2Q24) Brazil is the largest country in Latin America by GDP(1). The country has a population of 211 million people and is expected to grow to 216 million by 2028. Brazil’s real GDP is expected to grow at a 1.9% CAGR over th
Slide 42: Colombia
COLOMBIA Entered Market in 2020 | 243 Towers (as of 2Q24) Colombia is the 4th largest country in Latin America by GDP(1). The country has a population of 52 million people and is expected to grow to 53 million by 2028. Colombia’s real GDP is expected to grow at a 2.8% CAGR over the next five years.
Slide 43: Kuwait
KUWAIT Entered Market in 2020 | #1 Independent TowerCo | 1,676 Towers (as of 2Q24) Kuwait is 8th largest country in the Middle East by GDP(1). The country has a population of 4.8 million people and is expected to grow to 5.1 million by 2028. Kuwait’s real GDP is expected to grow at 2.3% CAGR over th
Slide 44: Financial Reconciliations
FINANCIAL RECONCILIATIONS 44
Slide 45: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from (loss)/income for the period to Adjusted EBITDA 3-month period ended LTM as of LTM as of LTM as of ($000s) June 30, 2023(1) Sep 30, 2023(1) Dec 31, 2023 Mar 31, 2024 June 30, 2024 June 30, 2023(1) Mar 31, 2024 June 30, 2024 (Loss)/income (1,270,326)
Slide 46: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from (loss)/income for the period to Adjusted EBITDA 2019 2020 2021 2022(1) 2023(1) ($000s) (Loss)/income (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 (Loss)/income margin (
Slide 47: 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) June 30, 2023(1) Sep 30, 2023(1) Dec 31, 2023 Mar 31, 2024 June 30, 2024 Cash from operations 259,098 229,912 162,054 92,984 151,596 Net m
Slide 48: 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) Cash from operations 966,874 902,923 Net movement in working capital 46,240 224,982 Income taxes paid (51,245) (45,411) Withholding tax (1) (116,1
Slide 49: Reconciliation of Return on Invested Capital
RECONCILIATION OF RETURN ON INVESTED CAPITAL Reconciliation from (loss)/income for the period to Adjusted EBITDA and Return on Invested Capital 2019 2020 2021(1) 2022(1) 2023 ($000s) (Loss)/income (423,492) (322,682) (26,121) (468,966) (1,988,178) Adjustments - - - - - Income tax expense 13,518 169,
Slide 50: Glossary of Terms
GLOSSARY OF TERMS IHS a)
Slide 51: Glossary of Terms
GLOSSARY OF TERMS Adjusted EBITDA (including by segment): income/(loss) for the period, before income tax expense/(benefit), finance costs and income, depreciation and amortization, impairment of withholding tax receivables, impairment of goodwill, business combination transaction costs, impairment
Slide 52: Glossary of Terms
GLOSSARY OF TERMS Lease Amendments: Refers to the installation of additional equipment on a site or the provision of certain ancillary services for an existing Tenant, for which we charge our customers a recurring lease fee. LTM Adjusted EBITDA: Adjusted EBITDA for the most recently ended four conse
Slide 53: IHS Towers Investor Relations
IHS Towers Investor Relations investorrelations@ihstowers.com ihstowers.com