Ihs Holding Limited · NYSE:IHS
Ihs — Q2 2022 Earnings Presentation
32 slides from Ihs's earnings presentation, Aug 16, 2022
Slide 1: 2Q22 Earnings Results
2Q22 Earnings Results August 16, 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 DARW ISH STEVE HOW DEN COLBY SYNESAEL Chairman and CEO Executive Vice President and Senior Vice President of Chief Financial Officer Communications 3
Slide 4: IHS Growth Strategy
IHS GROWTH STRATEGY REVENUE In US$M 1,580 (5) 1,403 24 1,231 Revenue 1,107 1,168 CAGR 2017 - 2021 +9.3% Organic Revenue • Capitalize on significant growth CAGR 2017 - 2021 opportunities in existing markets +18.2% • Optimize utilization of existing assets 2017A 2018A 2019A 2020A 2021A • Consolidate t
Slide 5: 2Q22 Performance and Recent Developments
2Q22 PERFORMANCE AND RECENT DEVELOPMENTS REVENUE In US$M 468 446 2Q22 Revenue Growth Y/Y 416 402 401 24 (1) +16.4% 2Q22 Organic Revenue Growth Y/Y • In 2Q22, constructed 240 new towers, 378 added 7,738 new tenants (7,017 from +9.9% the MTN South Africa acquisition) and added 2,153 new lease amendmen
Slide 6: IHS Group Snapshot
IHS GROUP SNAPSHOT 3rd Largest Independent Multinational 39,052 TowerCo Globally By Tower Count (1) Towers on 3 Continents (1) 220,096 137,851 16,738 6,859 Nigeria Brazil 39,052 38,879 5,691 2,690 South Africa Côte d’Ivoire 2,255 1,812 ~ 22,000 Cameroon Zambia 13,860 1,446 1,281 Kuwait Rwanda 228 52
Slide 7: South Africa Overview
SOUTH AFRICA OVERVIEW Entered market in 2022 | #1 Independent TowerCo | 5,691 Towers South Africa is the second largest country in Africa by GDP(1) and is expected to be a leader in 5G adoption in the continent. MNOs still own 61% of towers in the country and are financially sound. Combined, these a
Slide 8: Strategic Update
STRATEGIC UPDATE M&A Upstreaming • Focus is on integrating current completed acquisitions, whilst • Long track record of upstreaming USD from Nigeria selectively assessing any new opportunities • Have upstreamed $147M from Nigeria thru 2Q22; sourcing has • Continue to evaluate opportunities across t
Slide 9: Sustainability Is Our Business Model
SUSTAINABILITY IS OUR BUSINESS MODEL SUSTAINABILITY INITIATIVES IN 2Q22 OUR STRATEGY Ethics & Governance 2021 Sustainability Report LINK • In April, IHS Towers delivered a Group-wide HSSE • Fourth report published May 18, 2022. campaign to celebrate World Day for Safety and Health at • Serves as sec
Slide 10: Consolidated Results Snapshot
CONSOLIDATED RESULTS SNAPSHOT 2Q21 2Q22 Y/Y Towers (#) 30,207 39,052 29.3% Tenants (#) 45,487 57,381 26.1% Colocation Rate 1.51x 1.47x (0.04x) Lease Amendments (#) 21,478 30,670 42.8% In US$M, unless stated Revenue 402 468 16.4% Adjusted EBITDA 275 239 (13.1%) Adjusted EBITDA Margin 68.4% 51.1% (1,7
Slide 11: 2Q22 Consolidated Revenue Walk
2Q22 CONSOLIDATED REVENUE WALK 2Q REVENUE +9.9% In US$M Growth +$66M (1) or +16.4% (1) 2Q22 Organic Inorganic Revenue Growth Growth +8.7% Rate Y/Y Organic Growth +$40M (1) or +9.9% (1) • By Segment • Nigeria +10.4% • SSA +4.6% (9) 468 • Latam +27.9% 35 • MENA +13.5% 14 (15) 6 5 7 23 402 +5.6% +1.8%
Slide 12: 2Q22 Segment Performance Highlights
2Q22 SEGMENT PERFORMANCE HIGHLIGHTS Revenue & Adjusted EBITDA In US$M 2Q21 2Q22 Y/Y Towers 16,522 16,738 1.3% Tenants 24,602 25,685 4.4% Lease Amendments 20,523 29,585 44.2% Nigeria Revenue 297 321 8.3% Adjusted EBITDA 240 184 (23.6%) Adjusted EBITDA Margin % 81.0% 57.2% (2,380 Bps) Towers 7,827 13,
Slide 13: Towers & Tenants
TOWERS & TENANTS TOWERS TOWERS BUILT In ‘000s (3) 39.1 1.4 (3) 33.3 30.2 30.5 31.0 1.4 7.1 1.2 1.2 1.4 439 4.9 7.1 4.6 4.8 39 13.7 315 320 105 7.8 7.9 7.9 7.9 8 19 240 161 203 21 175 23 74 41 16.5 16.6 16.9 16.9 16.7 39 276 39 39 108 115 98 100 37 2Q21 3Q21 4Q21 1Q22 2Q22 2Q21 3Q21 4Q21 1Q22 2Q22 Ni
Slide 14: Consolidated Revenue and Adjusted EBITDA
CONSOLIDATED REVENUE AND ADJUSTED EBITDA REVENUE Reported (3) +16.4% Growth Y/Y +21.2% +8.7% +12.1% +23.4% +16.4% Organic (3) Growth Y/Y +24.4% +11.8% +14.5% +21.5% +9.9% In US$M 2Q22 Revenue Growth Rate Y/Y (4) (4) 446 (4) 468 402 401 416 9 9 7 8 31 43 14 15 7 20 88 86 95 84 24 (1) 89 • 2Q22 revenu
Slide 15: Recurring Levered Free Cash Flow and Capex
RECURRING LEVERED FREE CASH FLOW AND CAPEX RECURRING LEVERED FREE CASH FLOW In US$M $88M 63.2% (2) 2Q22 Recurring Levered 174 (2) (2) 33.7% 40.4% 35.7% 36.6% Free Cash Flow (1) (2) 61 88 87 88 • 2Q22 RLFCF decreased (49.7%) Y/Y 74 113 • 2Q22 RLFCF grew +5.0% Y/Y excluding $61M of non-recurring items
Slide 16: Debt and Other Matters
DEBT AND OTHER MATTERS As of March 31, As of June 30, In US$M 2022 2022 8.000% Senior Notes due 2027 940 940 3.1x 5.625% Senior Notes due 2026 500 500 6.250% Senior Notes due 2028 500 500 Consolidated Net Leverage Ratio as of June 30, 2022 Nigeria Senior Credit Facilities 365 332 Other Indebtedness
Slide 17: 2022 Guidance
2022 GUIDANCE Key Points • Revenue mid-point of $1,895M represents ~15% organic growth Y/Y 2022 GUIDANCE • FY22 new sites of ~1,750 of which ~950 in Nigeria and ~400 in Latam Previous Range (previously 2,350) due to timing and Metrics Current Range (May 17, 2022) has a minimal impact on our financia
Slide 18: FX Overview
FX OVERVIEW 2Q22 REVENUE BY REPORTING CURRENCY (1) KWD ZAR RWF 2% 2% ZMW 3% FX Rates 4% Assumed in 2022 Guidance BRL 9% (2) (1) • 2022 average rates EUR 12% (1) • USD:NGN = 427 NGN • USD:BRL = 5.16 69% • USD:EUR = 0.93 • USD:ZMW = 17.69 • USD:RWF = 1,025 • USD:KWD = 0.31 2Q22 REVENUE BY LINKED CONTR
Slide 19: Appendix
Appendix MHS | 2
Slide 20: FX Resets Impact on Our Business
FX RESETS IMPACT ON OUR BUSINESS USD FX RESET FREQUENCY (1) Semi-annually 3% Monthly Annually FX Resets 4% 7% How FX resets work • Relevant for portion of contracts tied to “hard currency” such as USD or Euro Quarterly • We are paid in local currency, but 86% absolute amount adjusts based on the har
Slide 21: Oil Impact on Our Business
OIL IMPACT ON OUR BUSINESS (1) POWER SOLUTION AS AT DEC 31, 2021 Oil Impact Grid / Solar / other 7% Grid connectivity • For the last several years, IHS has and back up added hybrid (solar/battery) powered generator Hybrid 24% 42% solutions. As part of Project Green, we expect to continue to upgrade
Slide 22: Revenue Overview
REVENUE OVERVIEW 2Q22 REVENUE BY KEY CUSTOMERS 2Q22 REVENUE BY SEGMENT 1% 1% 2% 1% 2% 4% 3% 9% 4% 4% 20% 16% 62% 69% (1) MTN Airtel Orange TIM 9mobile Zain Claro Vivo Oi (Fixed) Other Nigeria SSA Latam MENA (1) Customer Credit Rating (1) MTN Airtel Orange TIM 9Mobile Zain Claro Vivo Oi (Fixed) Fitch
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) Nigeria 16,738 1 59% 3 out of 4 South Africa 5,691 1 52% 2 out of 4 CIV 2,690 1 100% 2 out of 3 Cameroon 2,255 1 100% 2 out of 3 Zambia 1,812 1 59% 2 out of 3 Rwanda 1,281 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 Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Jun 30, Mar 31, Jun 30, 2021 2021 2021 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)/profit (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 6
Slide 27: 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 Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, 2021 2021 2021 2022 2022 $'000 $'000 $'000 $'000 $'000 Cash from operations 190,632 205,672 190,184 1
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 2Q21 3Q21 4Q21 1Q22 2Q22 2020A 2Q21 3Q21 4Q21 1Q22 2Q22 Nigeria (Naira) – USD:NGN NAFEX 382 411 412 415 417 419 410 411 415 435 417 425 European Union (Euro) – USD:EUR 0.88 0.83 0.85 0.87 0.89 0.94 0.82 0.84 0.86 0.88 0.90 0.95 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 LTM Adjusted EBITDA: Adjusted EBITDA for the most recently ended four consecutive fiscal quarters. 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 managem
Slide 32: Towers of strength
Towers of strength instowers.com