IHS Holding Limited Ordinary Shares

Good day and welcome to the IHS Holding Limited earnings results call for the three-month and full-year periods ended December 31st, 2022. Please note that today's conference is being webcast and recorded. If you would like to ask a question, please press star and then the number one on your telephone keypad at any time. At this time, I'd like to turn the conference over to Colby Fanasel.

Please go ahead, sir. Thank you, Operator. Thanks also to everyone for joining the call today. I'm Colby Sinasa, the EVP of communications here at IHS. With me today are Sam Darwish, our chairman and CEO, and Steve Howden, our CFO. This morning, we filed our annual report on Form 20F for the full year ended December 31st, 2022 with the SEC, which can also be found on the investor relations section of our website and issued a related earnings release and presentation. These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under the ticker symbol IHS. which compromises the entirety of the group's operations. First, we apologize for having to reschedule our earnings call to today, but as our announcement noted, it was important that we took the extra time to complete our year-end closing process procedures, particularly relating to the integration of recent acquisitions. Second, and before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on slide two, which should be read in full along with the cautionary statement regarding forward-looking statements set out in the earnings release in Form 20-F filed as well today. In particular, the information to be discussed may contain forward-looking statements which, by their nature, involve known and unknown risks, uncertainties, and other important factors, some of which are beyond our control, that are difficult to predict, and other factors which may cause actual results, performance, or achievements, or industry results to be materially different from any future results, performance, or achievements, or industry results expressed or implied by such forward-looking statements including those discussed in the risk factors section of our Form 20F filed today with the Securities and Exchange Commission and our other filings filed with the SEC. We'll also refer to non-IFRS measures that we view as important in assessing the performance of our business. Reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available on the investor relations section of our website. And with that, I'd like to turn the call over to Sam Darwish, our chairman and CEO.

Thanks, Colby, and welcome everyone to our fourth quarter and year-end 2022 earnings results call. We had a strong quarter with 2022 revenue, adjusted EBITDA and RLFCF, all at the high end or above our guidance. The strength was primarily driven by continued secular demand and, to a lesser degree, additional power revenue and a $4 million forex tailwind versus rates previously assumed in guidance. For the year, we generated revenue of $1.961 billion, adjusted EBITDA of $1.031 billion, and RLFCF of $363 million, with organic revenue growth of 19.5%. We are excited to have crossed the $1 billion adjusted EBITDA mark for the first time ever. We expect this trend to continue, which is reflected in our 2023 guidance that we are introducing today. I would note guidance includes approximately $40 million of revenue from a one-time cash payment received in the first quarter 23 from our smallest key customer in Nigeria. This was for services we previously provided to them, but had not previously recognized given our revenue recognition policy. Even excluding this payment though, the midpoint of our revenue guidance implies organic revenue growth of approximately 21%. Skipping to slide seven, I want to discuss some of our key highlights this past year, our first full year as a public company. In 2022, we completed two acquisitions, including SP5 in Brazil and the MTM portfolio in South Africa. The SP5 acquisition in March added over 2,100 towers, and we now have nearly 7,000 towers in Brazil, making us the third largest independent tower operator in the country. And as you'll see in our guidance, we expect to triple our BTS program in LATAM this year versus last year. We also continue to make good progress building our neutral host fiber business, iSystems, with the network now passing 7.5 million homes as of the fourth quarter 22, including 4.5 million with fiber. This position is versus the 6.4 million homes, and 3.5 million with fiber when we acquired the network from Tim in November 2021. We expect to make further progress in 2023 towards our goal to pass 10 million homes with fiber by the end of 2026. In total, our LATAM business generated over $125 million of annualized segment adjusted EBITDA in the fourth quarter 2022. In South Africa, our acquisition of the MTN portfolio in May immediately made us the largest independent tower operator in the country. As part of that deal, we also agreed to provide power managed services on an additional approximately 7,100 sites for MTN. Given various dynamics in the market, including an unprecedented level of load shedding that has occurred in the country post-deal close, we may evaluate additional opportunities to provide power managed services and will update you as appropriate if necessary. Both Latam, Brazil particularly, and South Africa represent two newer markets of scale in our portfolio that provide us outlets for additional growth and opportunities to further diversify our business. Moving on, in 2022, we took initial steps to help improve stock liquidity, including waiving the registered stock offering requirement for the Block A shares in May, which has helped our trading volumes. With the Block B shares becoming freely tradable in April 2023, and the Block C and D shares becoming freely tradable in October 2023, we believe that volumes may further improve this year, and we continue to evaluate options that we believe will enhance the value of the company. At the same time, we continue to focus on delivering against our publicly stated fundamental objectives and building a track record with investors. During 2022, we also took steps to further strengthen our balance sheet by raising a new three-year bullet term loan at the group level that we used to repay near-term debt, and we extended our group revolving credit facility maturity to 2025. I'm also pleased to announce today that we've taken additional steps already in 2023 to strengthen the balance sheet by raising a new Naira-based five-year term loan and three-year revolving credit facility that we use to repay near-term and amortizing Naira-based debt. Including our cash position and Andron debt capacity, we have over $1 billion of capital available with no meaningful maturities due until Q4 2025. Our treasury team was also busy this past year, helping upstream $207 million from Nigeria, including $60 million in December. And we have since upstreamed an additional $16 million in January as part of the same structured transaction. This compares to the $179 million we upstreamed in 2021, despite what has been a more challenging environment. In our view, this success in upstreaming reflects our strong relationships with our banking partners, as well as the important role our sector plays in the Nigerian economy. Lastly, in October, we announced Project Green, the next phase of our carbon reduction roadmap. Under Project Green, we expect to invest $214 million between 2022 and 2024 to connect more sites to the grid and add more batteries and solar solutions to our towers in six different markets. This, in return, is expected to generate RLFCF savings of $77 million by 2025 and generate an attractive 30% IRR. As a reminder, as part of our carbon reduction roadmap, we committed to reduce our scope 1 and scope 2 GHG emissions intensity per kilowatt by 50% by 2030, which, as I've said before, we believe makes smart business sense and helps improve the environment in the communities in which we operate. I'm also pleased to announce that in February, we received an ESG rating by Sustainalytics, which further speaks to our focus and commitment to sustainability. In conclusion, I'm very pleased with how we performed in 2022 and the direction our business is heading as we continue to focus on organic growth, executing on Project Green, risk management, ways to strategically enhance the value of our business, and making RHS a place at which our employees are happy and proud to work. With that, I will turn the call over to Steve.