IHS : Presentation (IHS Holding Limited 3Q24 Presentation)
IHS
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 Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this presentation may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecast," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this presentation include, but are not limited to statements regarding our future results of operations and financial position, future organic growth, anticipated results for the fiscal year 2024, industry and business trends, business strategy, plans (including our strategic review and related productivity enhancements and cost reductions, and our ability to refinance or meet our debt obligations), market growth, position and our objectives for future operations, including our ability to maintain relationships with customers and continue to renew customer lease agreements or the potential benefit of the terms of such renewals or our ability to grow our business through acquisitions, the impact (illustrative or otherwise) of the new agreements with MTN Nigeria (including certain rebased fee components) on our financial results, the impact of currency and exchange rate fluctuations (including the devaluation of the Naira) and other economic and geopolitical factors on our future results and operations, the outcome and potential benefit of our strategic review, and our objectives for future operations. We have based these forward- looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: non-performance under or termination, non-renewal or material modification of our customer agreements; volatility in terms of timing for settlement of invoices or our inability to collect amounts due under invoices; a reduction in the creditworthiness and financial strength of our customers; the business, legal and political risks in the countries in which we operate; general macroeconomic conditions in the countries in which we operate; changes to existing or new tax laws, rates or fees foreign exchange risks, particularly in relation to the Nigerian Naira, and/or ability to hedge against such risks in our commercial agreements or to access U.S. Dollars in our markets; the effect of regional or global health pandemics, geopolitical conflicts and wars, and acts of terrorism; our inability to successfully execute our business strategy and operating plans, including our ability to increase the number of Colocations and Lease Amendments on our Towers and construct New Sites or develop business related to adjacent telecommunications verticals (including, for example, relating to our fiber businesses in Latin America and elsewhere) or deliver on our sustainability or environmental, social and governance (ESG) strategy and initiatives under anticipated costs, timelines, and complexity, such as our Carbon Reduction Roadmap (and Project Green), including plans to reduce diesel consumption, integrate solar panel and battery storage solutions on tower sites and connect more sites to the electricity grid; our reliance on third-party contractors or suppliers, including failure, underperformance or inability to provide products or services to us (in a timely manner or at all) due to sanctions regulations, supply chain issues or for other reasons; our estimates and assumptions and estimated operating results may differ materially from actual results; increases in operating expenses, including increased costs for diesel; failure to renew or extend our ground leases, or protect our rights to access and operate our Towers or other telecommunications infrastructure assets; loss of customers; risks related to our indebtedness; changes to the network deployment plans of mobile operators in the countries in which we operate; a reduction in demand for our services; the introduction of new technology reducing the need for tower infrastructure and/or adjacent telecommunication verticals; an increase in competition in the telecommunications tower infrastructure industry and/or adjacent telecommunication verticals; our failure to integrate recent or future acquisitions; the identification by management of material weaknesses in our internal control over financial reporting, which could affect our ability to produce accurate financial statements on a timely basis or cause us to fail to meet our future reporting obligations; increased costs, harm to reputation, or other adverse impacts related to increased intention to and evolving expectations for environmental, social and governance initiatives; our reliance on our senior management team and/or key employees; failure to obtain required approvals and licenses for some of our sites or businesses or comply with applicable regulations; inability to raise financing to fund future growth opportunities or operating expense reduction strategies; environmental liability; inadequate insurance coverage, property loss and unforeseen business interruption; compliance with or violations (or alleged violations) of laws, regulations and sanctions, including but not limited to those relating to telecommunications regulatory systems, tax, labor, employment (including new minimum wage regulations), unions, health and safety, antitrust and competition, environmental protection, consumer protection, data privacy and protection, import/export, foreign exchange or currency, and of anti-bribery, anti-corruption and/or money laundering laws, sanctions and regulations; fluctuations in global prices for diesel or other materials; disruptions in our supply of diesel or other materials; legal and arbitration proceedings; our reliance on shareholder support (including to invest in growth opportunities) and related party transaction risks; risks related to the markets in which we operate, including but not limited to local community opposition to some of our sites or infrastructure, and the risks from our investments into emerging and other less developed markets; injury, illness or death of employees, contractors or third parties arising from health and safety incidents; loss or damage of assets due to security issues or civil commotion; loss or damage resulting from attacks on any information technology system or software; loss or damage of assets due to extreme weather events whether or not due to climate change; failure to meet the requirements of accurate and timely financial reporting and/or meet the standards of internal control over financial reporting that support a clean certification under the Sarbanes Oxley Act; risks related to our status as a foreign private issuer; and the important factors discussed in the section titled "Risk Factors" in our Annual Report on Form 20-F for the fiscal year ended December 31, 2023. The forward-looking statements in this presentation are based upon information available to us as of the date of this presentation, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. You should read this presentation and the documents that we reference in this presentation with the understanding that our actual future results, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Additionally, we may provide information herein that is not necessarily "material" under the federal securities laws for SEC reporting purposes, but that is informed by various ESG standards and frameworks (including standards for the measurement of underlying data), and the interests of various stakeholders. Much of this information is subject to assumptions, estimates or third-party information that is still evolving and subject to change. For example, we note that standards and expectations regarding greenhouse gas (GHG) accounting and the processes for measuring and counting GHG emissions and GHG emissions reductions are evolving, and it is possible that our approaches both to measuring our emissions and any reductions may be at some point, either currently or in future, considered by certain parties to not be in keeping with best practices. In addition, our disclosures based on any standards may change due to revisions in framework requirements, availability of information, changes in our business or applicable government policies, or other factors, some of which may be beyond our control. These forward-looking statements speak only as of the date of this presentation. Except as required by applicable law, we do not assume, and expressly disclaim, any obligation to publicly update or revise any forward-looking statements contained in this presentation, whether as a result of any new information, future events or otherwise.
Use of Non-IFRS financial measures
Certain parts of this presentation contain non-IFRS financial measures, including but not limited to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Levered Free Cash Flow ("ALFCF"), ALFCF Cash Conversion Rate. The non-IFRS financial information is presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with IFRS and may be different from similarly titled non-IFRS measures used by other companies. Our management uses Adjusted EBITDA, Adjusted EBITDA Margin and ROIC as an indicator of the operating performance of our core business. We believe that Adjusted EBITDA, Adjusted EBITDA Margin and ROIC are useful to investors and are used by our management for measuring profitability and allocating resources, because they exclude the impact of certain items which have less bearing on our core operating performance. We believe that utilizing Adjusted EBITDA, Adjusted EBITDA Margin and ROIC allows for a more meaningful comparison of operating fundamentals between companies within our industry by eliminating the impact of capital structure and taxation differences between the companies. Our management uses ALFCF and ALFCF Cash Conversion Rate to assess the long-term, sustainable operating liquidity of our business. Starting in the third quarter of 2023, we replaced RLFCF with ALFCF. As a result, we have re-presented the 1Q23 and 2Q23 measures to be on a consistent basis with the ALFCF presented for the subsequent periods. Unlike RLFCF, ALFCF and ALFCF Cash Conversion Rate excludes the reversal of movements in the net loss allowance on trade receivables and impairment of inventory to better reflect the liquidity position in each period. ALFCF and ALFCF Cash Conversion Rate only includes the cash costs of business combination transaction costs, other costs and other income. There is otherwise no change in the definition or calculation of this metric for the periods presented as a result of the name change. Non-IFRS measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to us, many of which present non-IFRS measures when reporting their results. Non-IFRS financial measures are used by different companies for differing purposes and are often calculated in ways that reflect the circumstances of those companies. You should exercise caution in comparing non-IFRS financial measures as reported by us to non-IFRS financial measures as reported by other companies. These metrics have limitations as analytical tools, you should not consider such financial measures in isolation from, or as a substitute analysis for, our results of operations as determined in accordance with IFRS. These metrics are not measures of performance or, in the case of ALFCF and ALFCF Cash Conversion Rate, liquidity under IFRS and you should not consider Adjusted EBITDA, Adjusted EBITDA Margin or ROIC for the period as an alternative to profit/(loss) or ALFCF and ALFCF Cash Conversion Rate as an alternative to cash from operations, or other financial measures determined in accordance with IFRS. Non-IFRS financial measures described in this presentation are unaudited and have not been prepared in accordance with IFRS or any other generally accepted accounting principles. In addition, the presentation of these measures is not intended to and does not comply with the reporting requirements of any regulatory authority and will not be subject to review by a regulatory authority; compliance with such requirements may require us to make changes to the presentation of this information. Definitions and reconciliations of these non-IFRS measures to the most directly comparable IFRS measures are provided in the Appendix and Glossary as applicable.
The presentation of LTM Pro Forma Adjusted EBITDA should not be construed as an inference that our future results will be consistent with our "as if" estimates. These "as if" estimates of potential operating results were not prepared in accordance with IFRS or the pro forma rules of Regulation S-X promulgated by the Securities and Exchange Commission (the "SEC"). Furthermore, while LTM Pro Forma Adjusted EBITDA gives effect to management's estimate of a full year of Adjusted EBITDA in respect of acquisitions completed in the applicable period, LTM Pro Forma Adjusted EBITDA does not give effect to any Adjusted EBITDA in respect of such acquisitions for any period prior to such applicable period. As a result, the LTM Pro Forma Adjusted EBITDA across different periods may not necessarily be comparable.
This presentation also includes certain forward-looking non-IFRS financial measures, including Adjusted EBITDA and ALFCF. We are unable to provide a reconciliation of such forward-looking non-IFRS financial measures without an unreasonable effort due to the uncertainty regarding, and the potential variability of, the applicable costs and expenses that may be incurred in the future, including, in the case of Adjusted EBITDA, share-based payment expense, finance costs, insurance claims, net movement in working capital, other non-operating expenses, and impairment of inventory, and in the case of Adjusted Levered Free Cash Flow, cash from operations, net working capital movements and maintenance capital expenditures, all of which may significantly impact these non-IFRS measures. Accordingly, investors are cautioned not to place undue reliance on this information.
Rounding
Certain numbers, sums, and percentages in this presentation may be impacted by rounding.
Use of Market and Industry Data
We obtained the industry, market and competitive position data and forecasts in this presentation from our own internal estimates and research as well as from publicly available information, industry and general publications and research conducted by third parties, including Analysys Mason Limited (Analysys Mason), delivered in April 2024 for use in this presentation. Such market data is derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from internal research, and are based on assumptions made by us upon reviewing such data, and our experience in, and knowledge of, such industry and markets, which we believe to be reasonable. Analysys Mason's third-party data is also prepared on the basis of information provided and views expressed by mobile operators, tower operators and other parties (including certain views expressed and information provided or published by individual operators, service providers, regulatory bodies, industry analysts and other third-party sources of data). Although Analysys Mason has obtained such information from sources it believes to be reliable, neither we nor Analysys Mason have verified such information. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates, as there is no assurance that any of them will be reached. Forecasts and other forward-looking information obtained from these sources and from our and Analysys Mason's estimates are subject to the same qualifications and uncertainties as the other forward-looking statements in this presentation and as described under "Forward-Looking Information." These forecasts and other forward-looking information are subject to uncertainty and risk due to a variety of factors which could cause results to differ materially from those expressed in the forecasts or estimates from independent third parties (including Analysys Mason) and us.
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PRESENTING TODAY
Sam Darwish
Steve Howden
Robert Berg
Chairman & CEO
Executive Vice President & CFO
Head of Investor Relations
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3Q24 PERFORMANCE
Revenue
$M
(10.0%)
3Q24 Revenue
Growth Y/Y
+49.0%
3Q24 Organic Revenue
Growth Y/Y
510
Adjusted EBITDA & ALFCF(1)
$M
274
+3.3%
3Q24 Adjusted EBITDA
Growth Y/Y
+1.6%
3Q24 ALFCF
Growth Y/Y
• In 3Q24, constructed 193 towers,
decreased net (67) tenants, and added net
697 lease amendments
• 3Q24 Revenue of $420M decreased by
(3.5%) Q/Q, inclusive of the new MTN
Nigeria commercial deal
• 3Q24 Revenue of $420M decreased
(10.0%) (organic +49.0%) Y/Y
• USD:NGN devalued by 52% from 768
in 3Q23 to 1,601 in 3Q24, on average
467
435
420
418
238
251
246
• Equates to $265M headwind Y/Y from
the NGN devaluation
3Q23
4Q23
1Q24
2Q24
3Q24
Revenue
185
86
118
43
67
3Q23(2)
4Q23
1Q24
2Q24
Adjusted
51.0%
53.8%
44.3%
57.6%
EBITDA
Margin
ALFCF
Adjusted EBITDA
87
3Q24
58.5%
• 3Q24 Adjusted EBITDA of $246M (margin
58.5%) decreased by (1.9%) Q/Q
• 3Q24 Adjusted EBITDA of $246M
(margin 58.5%) increased +3.3% Y/Y
• 3Q24 ALFCF increased by +30.3% Q/Q
• 3Q24 ALFCF of $87M increased by
+1.6% Y/Y
(2) Re-presented to reflect an adjustment related to the accounting treatment of foreign exchange on goods in transit in Nigeria
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IHS GLOBAL TOWER PORTFOLIO
In 3Q24, we built +193 towers including +158 in Brazil
40,650
Towers on 3 Continents (1)
Africa and the Middle East
Latin America
Egypt(2)
-
Kuwait
1,675
Nigeria
16,488
Cameroon
2,437
Rwanda
1,442
Zambia
1,875
Côte d'Ivoire
2,686
South Africa
5,693
Colombia 245
Brazil8,109
3rd Largest
Independent Multinational TowerCo Globally By Tower Count (1)
147,299
113,216
40,650
GD Towers
~40,000
39,762
~24,000
14,247
(1)
Tower count as reported as of September 30, 2024, except Cellnex which is as of June 30, 2024
5
(2)
Signed a partnership in Oct. 2021 with Egypt Digital Company for Investment S.A.E. (an investment vehicle of the Egyptian Ministry of Communications) to obtain a license from the National Telecom Regulatory Authority ("NTRA") to construct, operate and lease telecom towers in Egypt
HIGHLIGHTS
Strategic Review
MTN Commercial Update
Improving Financial Profile
Balance Sheet
Nigeria
(1)
As of June 30, 2024, as adjusted for all tower MLAs with MTN Nigeria that have been renewed and extended on August 7, 2024
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(2)
Proportion of 3Q24 revenue renewed since the start of 2023
OUR APPROACH TO SUSTAINABILITY
Sustainability Initiatives in 3Q24
Our Strategy
Four-pillar Sustainability Strategy
Ethics and governance
Environment and climate change
Education and economic growth
Our people and communities
UN Sustainable Development Goals
2023 Sustainability Report
ESG Ratings
Sustainability Assessment (CSA Score)
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CONSOLIDATED RESULTS SNAPSHOT
3Q23
3Q24
Y/Y
Towers (#)
39,739
40,650(3)
2.3%
Tenants (#)
59,196
60,315(3)
1.9%
Colocation Rate
1.49x
1.48x(3)
(0.01x)
Lease Amendments (#)
35,254
39,389
11.7%
In US$M, unless stated
Revenue
467
420
(10.0%)
Adjusted EBITDA
238(1)
246
3.3%
Adjusted EBITDA margin
51.0%(1)
58.5%
750 Bps
Adjusted Levered Free Cash Flow
86
87
1.6%
ALFCF Cash Conversion Rate
36.0%
35.4%
(60 Bps)
Capex
101(1)
66
(34.1%)
Consolidated Net Leverage Ratio (2)
3.3x
3.9x
0.6x
(1)
Re-presented to reflect an adjustment related to the accounting treatment of foreign exchange on goods in transit in Nigeria
(2)
Consolidated Net Leverage Ratio is defined and calculated using LTM Pro Forma Adjusted EBITDA (see Glossary for further definition), based on the requirements of the indentures governing our outstanding Senior Notes, which are filed with the SEC as exhibits to our Annual Report
on Form 20-F for the year ended December 31, 2023
(3)
3Q24 includes 210 reintegrated towers and (529) churned tenants from our smallest key customer in Nigeria on which we were not recognizing revenue
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3Q24 CONSOLIDATED REVENUE WALK
3Q24 Revenue
$M
Total Growth
Total Growth ($47M) or (10.0%)
(10.0%) ($47M)
Organic Growth +$229M or +49.0%
Organic Growth
+49.0% +$229M
467
Organic Growth
420
by Segment
+86.8%
(6.2)%
(0.6)%
8.5%
21.0%
0.8%
1.0%
2.9%
17.6%
2.0%
(4.8)%
0.0%
(59.1%)
+19.2%
(1)
(2)
Nigeria
SSA
Latam
MENA
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FX AND POWER EXPOSURE OVERVIEW
Revenue by Reporting Currency (1)
3Q24
58%
15%
(2)
11%
6%
NGN
EUR
BRL
ZAR
4%
3%
3%
ZMW
RWF
KWD
Revenue by Linked Contract Split
3Q24
26%
13%
21%
41%
USD
EUR(2)
Power(3)
Local Currency
59%
"Hard" Currencies and Power
Power Exposure by Country
Country
Power
Power Pass-
Indexation
Through
Nigeria
Brazil
South Africa
Côte d'Ivoire
Cameroon
Zambia
Kuwait
Rwanda
Colombia
(3) Power includes Power Indexation and Power Pass-Through
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Disclaimer
IHS Holding Ltd. published this content on November 12, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 12, 2024 at 11:21:10.262.