Ihs Holding Limited · NYSE:IHS
Ihs — Q2 2023 Earnings Presentation
32 slides from Ihs's earnings presentation, Aug 15, 2023
Slide 1: 2Q23 Earnings Results
2Q23 Earnings Results August 15, 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$M 1,961 (2) 18 Revenue 1,580 (1) CAGR 2018 - 2022 1,403 24 1,168 1,231 +13.8% Organic Revenue CAGR 2018 - 2022 • Capitalize on significant growth +15.2% opportunities in existing markets • Optimize utilization of existing assets 2018 2019 2020 2021 2022 • Consolidat
Slide 5: 2Q23 Performance
2Q23 PERFORMANCE REVENUE In US$M 603 (2) 48 546 521 526 2Q23 Revenue (1) 18 Growth Y/Y 468 +16.8% • In 2Q23 we constructed 278 new towers and added 301 new tenants 2Q23 Organic Revenue Growth Y/Y • 2Q23 revenue includes a $37M +29.7% headwind Q/Q and a $25M headwind vs. rates previously assumed in g
Slide 6: IHS Group Snapshot
IHS GROUP SNAPSHOT 5th Largest Independent Multinational 39,298 TowerCo Globally By Tower Count (1) 224,019 Towers on 3 Continents (1) 128,797 16,398 7,139 Nigeria Brazil ~41,500 39,560 39,298 5,691 2,697 South Africa Côte d’Ivoire 2,309 1,855 ~22,000 Cameroon Zambia 13,870 1,544 1,380 Kuwait Rwanda
Slide 7: 2Q23 Highlights
2Q23 HIGHLIGHTS Nigeria Brazil South Africa • Over the last few months, the new administration • Macro conditions continue to improve following the • IHS is the #1 independent TowerCo in South Africa by implemented three significant policy changes: governmental transition in January; FX rates have t
Slide 8: Our Approach to Sustainability
OUR APPROACH TO SUSTAINABILITY SUSTAINABILITY INITIATIVES IN 2Q23 OUR STRATEGY Ethics and governance Four-pillar Sustainability Strategy: • IHS Kuwait sponsored the Youth Forum to Integrity in partnership with • Ethics and governance the Kuwait Transparency Society which promotes anti-corruption • E
Slide 9: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT 2Q22 2Q23 Y/Y Towers (#) 39,052 39,298 0.6% Tenants (#) 57,381 58,447 1.9% Colocation Rate 1.47x 1.49x 0.02x Lease Amendments (#) 30,670 34,234 11.6% In US$M, unless stated Revenue 468 546 16.8% (1) Adjusted EBITDA 239 304 27.0% Adjusted EBITDA Margin 51.1% 55.6% 450 Bp
Slide 10: 2Q23 Consolidated Revenue Walk
2Q23 CONSOLIDATED REVENUE WALK 2Q23 REVENUE In US$M +29.7% Growth +$79M or +16.8% 2Q23 Organic Revenue Growth Rate Y/Y Organic Growth +$139M or +29.7% 18 • By Segment • Nigeria 36.7% 27 (79) • SSA 15.2% 6 • Latam 13.8% 24 546 • MENA 8.4% 13 6 • The Naira devaluation 6 accounts for 94% of the 20 FX h
Slide 11: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA REVENUE (1) +16.8% Reported (1) +16.4% +30.2% +26.6% +35.1% +16.8% Growth Y/Y Organic (1) Growth Y/Y +9.9% +23.1% +23.5% +38.0% +29.7% 2Q23 Revenue Growth Rate Y/Y In US$M 603 521 526 10 546 468 9 10 46 48 10 • 2Q23 revenue grew +16.8% Y/Y, of 9 42 44 122 43
Slide 12: Recurring Levered Free Cash Flow and Capex
RECURRING LEVERED FREE CASH FLOW AND CAPEX RECURRING LEVERED FREE CASH FLOW (1) In US$M 44.6% $91M 36.6% 36.3% 32.9% 149 (3) 30.0% 2Q23 Recurring Levered 88 (2) 90 99 43 91 Free Cash Flow (1) (2) 18 • 2Q23 RLFCF grew +4.0% Y/Y • 2Q23 Capex grew +41.0% Y/Y driven 2Q22 3Q22 4Q22 1Q23 2Q23 largely by N
Slide 13: 2Q23 Segment Performance Highlights
2Q23 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Segment Adjusted EBITDA In US$M 2Q22 2Q23 Y/Y Towers 16,738 16,398 (2.0%) Tenants 25,685 25,798 0.4% Lease Amendments 29,585 32,496 9.8% Nigeria Revenue 321 365 13.5% Segment Adjusted EBITDA 184 238 29.8% Segment Adjusted EBITDA Margin % 57.2% 65.4% 820
Slide 14: Towers & Tenants
TOWERS & TENANTS TOWERS TOWERS BUILT In ‘000s 39.1 39.4 39.7 39.1 39.3 1.4 1.5 1.5 1.5 1.5 7.1 7.2 7.3 7.3 7.4 385 356 19 13.7 13.8 13.9 13.9 13.9 56 23 278 240 67 81 10 21 198 68 74 29 7 175 16.7 16.9 17.0 243 50 16.4 16.4 108 184 112 48 37 45 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Niger
Slide 15: Debt and Other Matters
DEBT AND OTHER MATTERS As of March 31, As of June 30, In US$M 2023 2023 8.000% Senior Notes due 2027 940 940 3.1x Consolidated Net Leverage Ratio as of June 30, 2023 5.625% Senior Notes due 2026 500 500 6.250% Senior Notes due 2028 500 500 Other Indebtedness (1) (2) 2,119 2,119 • 9.5% weighted avera
Slide 16: 2023 Guidance
2023 GUIDANCE Key Points • Revenue guidance: • The $110M reduction in guidance includes a $141M FX headwind of which $142M is from the Naira net of FX resets, implying an increase of ~$31M had the average FX rates previously assumed in our guidance remained unchanged UPDATING 2023 GUIDANCE • Implies
Slide 17: FX Overview
FX OVERVIEW 2Q23 REVENUE BY REPORTING CURRENCY (1) KWD RWF FX Rates ZMW 2% 3% 3% ZAR 6% Assumed in 2023 Guidance BRL 9% • 2023 average rates • USD:NGN = 624 (2)(2) EUR (2) • USD:BRL = 5.09 11% NGN 67% • USD:EUR = 0.91 • USD:ZMW = 19.17 • USD:RWF = 1,138 • USD:KWD = 0.31 • USD:COP = 4,564 2Q23 REVENU
Slide 18: Appendix
Appendix MHS |
Slide 19: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS USD FX RESET FREQUENCY (1) Monthly 4% Semi-annually 3% FX Resets How FX resets work • A relevant portion of contracts is tied to a “hard currency” including USD and Euro • We are paid in local currency, but in certain countries, the absolute amount adjusts based on t
Slide 20: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS POWER SOLUTION AS AT DECEMBER 31, 2022 (1) Grid / Solar / other 7% Oil Impact Grid connectivity and back up • For the last several years, IHS has Hybrid generator 42% added hybrid (solar/battery) powered 26% solutions. As part of our Carbon Reduction Roadmap, we expect to
Slide 21: Finance Costs Breakdown
FINANCE COSTS BREAKDOWN 2Q23 ADJUSTED EBITDA TO LOSS FOR THE PERIOD In US$M 2Q23 Loss Adjustments: (1,248) Definitions Income tax expense 57 Finance costs 1,366 Finance income (8) • Net foreign exchange loss arising Depreciation and amortization 116 from financing – unrealized Impairment of withhold
Slide 22: 2Q23 Revenue Overview
2Q23 REVENUE OVERVIEW 2Q23 REVENUE BY KEY CUSTOMERS 2Q23 REVENUE BY SEGMENT 1% 1% 1% 2% 1% <1% 2% 3% 2% 9% 4% 5% 23% 18% 61% 67% MTN Airtel TIM Orange (1) 9mobile Zain Nigeria SSA Latam MENA Claro Vivo Oi (Fixed) Telkom Tigo Other (1) (1) Customer Credit Rating America Telefonica MTN Airtel Orange M
Slide 23: 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 16,398 60% 3 out of 4 1 South Africa 5,691 50% 2 out of 4 1 CIV 2,697 100% 3 out of 3 1 Cameroon 2,309 100% 2 out of 3 1 Zambia 1,855 100% 2 out of 3 Rwanda 1,380 1 99% 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 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 25: Adjusted EBITDA Reconciliation
ADJUSTED EBITDA RECONCILIATION Reconciliation from profit/(loss) for the period to Adjusted EBITDA 3-month period ended (1) LTM as of LTM as of LTM as of Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Jun 30, Mar 31, Jun 30, 2022 2022 2022 2023 2023 2022 2023 2023 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Slide 26: 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) (468,959) Adjustments: Income tax expense 46,748 13,518 169,829 17,980 (75,014) (1) 315,942 288,915 63
Slide 27: Recurring Levered Free Cash Flow Reconciliation
RECURRING LEVERED FREE CASH FLOW RECONCILIATION Reconciliation of cash from operations for the period to Recurring (1) 3-month period ended Levered Free Cash Flow Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, 2022 2022 2022 2023 2023 $'000 $'000 $'000 $'000 $'000 Cash from operations 216,800 295,208 287,8
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 2018 2019 2020 2021 2022 $'000 $'000 $'000 $'000 $'000 Cash from operations 554,940 660,025 656,699 788,073 966,431 Net movement in working capital 67,067 18,133
Slide 29: Currency Overview
CURRENCY OVERVIEW Average Period End Spot Currency FY21 2Q22 3Q22 4Q22 1Q23 2Q23 FY21 2Q22 3Q22 4Q22 1Q23 2Q23 Nigeria (Naira) – USD:NGN NAFEX 410 419 431 446 461 508 435 425 437 462 461 753 European Union (Euro) – USD:EUR 0.85 0.94 0.99 0.98 0.93 0.92 0.88 0.95 1.04 0.94 0.92 0.92 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 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 32: Towers of strength
Towers of strength instowers.com