Q4 2023 IHS Holding Ltd Earnings Call

Operator: Good day, and welcome to the IHS Hldg Limited 4Q and 4 Year Earnings Results Conference Call. Please note that today's conference is being webcast and recorded. If you would like to ask a question, please press star and then 1 on your telephone keypad at any time. At this time, I'd like to turn the conference over to Colby Synesael. Please go ahead.

Good day and welcome to the IHS holding limited <unk>, our full year earnings results Conference call. Please note that today's conference is being webcast and recorded if you'd like to ask a question. Please press Star then one on your telephone keypad at any time.

At this time I'd like to turn the conference over to Koby Sunday. So please go ahead Sir.

Colby Alexander Synesael: Thank you, Operator. Thanks also to everyone for joining the call today. I'm Colby Synesael, 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 20-F for the full year ended December 31, 2023 with the FEC, 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 Hldg Ltd., which is listed on the New York Stock Exchange under the ticker symbol IHS, and which comprises the entirety of the group's operation.

Thank you operator, thanks also to everyone for joining the call today.

I'll be fine its albi EVP of communications here at IHS with me today are Jim Darwish, our chairman and CEO.

<unk> and our CFO.

Morning, We filed our annual report on form 20-F for the full year ended December 31st 2023, with the SEC, which can also be found on the Investor Relations section of our website at Michigan related earnings release and presentation you.

The consolidated results of <unk> holding limited, which is listed on the New York stock exchange under the ticker symbol IHS, which comprises the entirety of the group's operations.

Colby Alexander Synesael: Before we discuss the results, I'd like to draw your attention to the disclaimer set out at the beginning of the presentation on slide 2, which should be read in full along with the cautionary statement regarding forward-looking statements set out in our earnings release and 20-F file as well today. In particular, the information to be discussed may contain forward-looking statements that, by their nature, involve known and unknown risks and 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. We will also refer to non-IFRS measures, A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation, which is available in the investor relations section of our website. With that, I'd like to turn the call over to Sam Darwish, our Chairman and CEO.

Before we discuss our results.

Like to draw your attention to the disclaimers set out at the beginning of the presentation on slide two which should be read in full along with the cautionary statements regarding forward looking statements.

In our earnings release, and 20-F filed as well to that.

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.

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 20-F filed today with the Securities and Exchange Commission and our other filings with the SEC.

Well also refer to non <unk> measures, including adjusted EBITDA that we view as important in assessing the performance of our business.

Yeah.

View as important in assessing the liquidity of our business a reconciliation of non <unk> metrics to the nearest <unk> metrics.

Metrics can be found in our earnings presentation, which is available on the Investor Relations section of our website.

With that I'd like to turn the call over to Sam Darwish, our chairman and CEO.

Sam Darwish: Thanks, Colby, and welcome everyone to our fourth quarter and year-end 2023 earnings results call. We're reporting a strong quarter of performance across our key metrics, with revenue adjusted EBITDA and ALSPF in line or ahead of our expectations. Despite the meaningful Nigerian currency devaluation that began in June, while CAPEX was meaningfully below expectations, our results reflect the continued strong secular trend we are seeing across our business, including growth in lease amendments, new tenants, new sites, or built-to-suit, and targeted fiber rollout. For 2023 as a whole, we are reporting 8% revenue growth, 10% adjusted EBITDA growth, 19% ALFCF growth, and an 8% reduction in CAPEX. Organic growth was 37%.

Thanks, Colby and welcome everyone to our fourth quarter and year end 2023.

That's cool.

We're reporting a strong quarter of performance across our key metrics with revenue adjusted EBITDA and <unk>.

In line with or ahead of our expectation.

The meeting suddenly getting get into evaluation that began in June while capex was meaningfully below expectations.

Our results reflect the continued strong secular trend, we are seeing across our business, including growth in lease amendments new tenants, new sites or built to suit and target the fiber rollout.

For 'twenty three as a whole we are reporting 8% revenue growth, 7% adjusted EBITDA growth, 19% <unk>.

Growth and an 8% reduction in Capex.

<unk> growth was 37%.

Sam Darwish: Groupwide, we added 1,041 collocations and 4,929 lease amendments, and we surpassed our expectations for new sites, having built 1,329 new towers, mostly in Brazil, with 812 in the country. As we continue to prioritize organically growing our asset base in that market. These strong growth trends should continue in 2024, as evidenced by our recently announced deal with Airtel in Nigeria that extended Airtel's contract to 2031 and included a commitment to add 3950 new tenancies over the next five years, much of it frontloaded to 2024 and 2025. This may take me to an important point. These strong fundamental trends are occurring against a challenging backdrop. The Naira continues to devalue at levels that are sadly offsetting much of these strong secular trends. From January to December 2023, the Naira suffered a 98% unfavorable movement.

Worldwide, we added 1041, Colocation and 4929 lease amendments and we surpassed our expectations for new sites.

<unk> 1329, New tower model in Brazil, with 800 and the country.

As we continue to price that is organically growing our asset base in that market.

These strong growth trends should continue in 2024 as evidenced by our recently announced deal with <unk> in Nigeria.

<unk> contract to 2031.

Included a commitment to add 3950, new tenancies over the next five years much of its front loaded to 2024 and 2025.

Which takes me to an important point.

These strong fundamental trends are occurring.

Against the challenging backdrop.

The data continues to devalue at levels that are offsetting much of the strong secular trends.

From January to December 2023, but neither suffered a 98% unfavorable movement.

Sam Darwish: And from January 2024 to date, we have seen a further 75% unfavorable movement. This means a total unfavorable movement of 246% since January 23. Most of this negative movement came as a result of positively viewed government actions of unifying multiple exchange rates and removing the expensive petrol subsidies.

From January 2024 to date, we have seen a further 75% unfavorable movement.

This means the total unfavorable movement of 246% since January 23.

Most of this negative movement came as a result of positively viewed government action of unifying multiple exchange rates.

The extent that federal subsidies.

Sam Darwish: I'm trying to contain the soaring inflation, which hit 28.9% in December 2023. While these actions were generally viewed positively by market observers and us, other supporting measures are required to contain the NIRA devaluation. Some of these required changes began to occur recently in Q1 as the Nigerian Monetary Policy Committee hiked the main policy interest rate by 400 basis points and added much needed forex to the daily market. This has helped stabilize the currency over the past few weeks. Some analysts, including Goldman Sachs, among others, are even predicting a strengthening Naira by the end of this year. Market observers expect the Monetary Policy Committee to further increase the main policy interest rate throughout 2024 as it aims to lower inflation and further stabilize the forex market.

And trying to contain that floating inflation.

With 28, 9% in December 2023.

While these actions were generally viewed positively by market observers and.

Other supporting measures are required to maintain the naira devaluation.

All of these require changes began to a third recently in Q1, and then I get in Monetary Policy Committee high the main policy interest rate by 400 basis points and adding much needed products to the daily market.

This has helped to stabilize the currency over the past few weeks.

Some analysts, including Goldman Sachs, among others, even predicting strengthening neither by end of this year.

Market observers expect the monetary policy committee to further increase the main policy interest rate throughout 2024.

Aimed to lower inflation and further stabilize the market.

Sam Darwish: From a 2023 result perspective, the forex protection mechanism in our revenue contract helps us offset the majority of this pressure during the year and was evident in our Q4 2023 results. However, we expect the additional devaluation that began in January to further impact our results in 2024. While Steve will discuss this further when he discusses guidance, to give you some context, our guidance for 2024 assumed an average rate of 1,610 Naira to the dollar, whereas the average rate in 2023 was 638, and that the devaluation in the Naira would have a negative 535 million dollar impact on revenue year-on-year, even after adjusting for the impact of the forex reset. Given the macro environment we're operating in, particularly in Nigeria, which represented 63 percent of revenue in Q4-23, we continue to take what we believe is a more balanced approach to growth and cash generation.

From a 2023 results perspective, the Forex protection mechanisms in our revenue contracts helped us offset the majority of the pressure in the year and was evident in our Q4 'twenty three result, however.

We expect the additional devaluation that began in January to further impact our results in 2024, while Steve will discuss this further when he discusses guidance to give you some context our guidance for 2024 assumed an average rate of 1610, neither to the dollar, whereas the average rate in 2020.

He was 638 and that the devaluation in denial will have a negative $535 million impact on revenue year on year, even after adjusting for the impact of the Forex reset given the macro environment, we're operating in.

Particularly in Nigeria, which represented 63% of revenue in Q4 'twenty three we continue to take what we believe is a more balanced approach to growth and cash generation.

Sam Darwish: We also expect the significant reduction in CAPEX that started in the second half of 2023 to continue in 2024, along with a continued focus on improving operating efficiencies through productivity enhancements and cost reduction. Excitingly, this also includes an increased focus on innovation, including the deepening usage of AI in how we utilize, maintain, and operate our towers. And it's something I'm very passionate about and personally spearheading. A dedicated team has been working for a while on developing use cases that can help us improve our efficiencies using the massive amount of data we have due to our extensive operations over decades. Skipping to slide 7.

We also expect the significant reduction in Capex that started in the second half of 2023 to continue in 2024, along with a continued focus on.

Improving operating efficiencies through.

Productivity enhancements and cost reductions.

<unk>. This also includes an increased focus on innovation, including the deepening usage of AI and how we used to lie maintain and operate on our towers and it's something I'm very passionate about and personally spearheading.

Our dedicated team has been working for a while on developing use cases that can help us improve our efficiency using the massive amounts of data we have due to our extensive operations over a decade.

Skipping to slide seven.

Sam Darwish: I want to discuss some of our key highlights. Starting with commercial progress. As of year end 2023, we had $11 billion of revenue under contract with an average remaining tenant term of 7.5 years. I think it's important to highlight these metrics as they point to the durability we believe is inherent in our business model, despite what the perception may be.

I'll also discuss some of our key highlights stocking.

Starting with commercial progress.

You'll see it in 2023, we had $11 billion of revenue under contract with an average remaining current term of seven five years.

I think it's important to highlight this message as they point to the durability, we believe inherent in our business model. Despite what the perception may be.

Sam Darwish: We continue to make progress on the commercial front across the business, as we have signed contracts with MTN in Cameroon and in Cote d'Ivoire for a further 10 years. In Nigeria, as MTN highlighted in their most recent earnings announcement earlier this month, we continue to engage constructively with them to find ways to alleviate some of the operating pressure they are under, given our key role in running the majority of their network in the country, while also maintaining appropriate economic results for ourselves. Also, as previously mentioned, we signed an extended contract with Airtel in Nigeria this past February, taking the turn into the next decade in an agreement that includes a commitment by Airtel Nigeria to add 3,950 new tenancies over the next five years, and it's front-loaded over the next two.

We continue to make progress on the commercial front across the business as we have signed contract with MTN in Cameroon and in Cote d'ivoire for a further 10 years.

In Nigeria as MTN highlighted in their most recent earnings announcement earlier. This month, we continue to engage.

Constructively with them to find ways to alleviate some of the operating pressure they are under given our key role in running the majority of the network in the country. While also maintaining appropriate economic result for our sellers.

Also as previously mentioned, we signed an extended contact with <unk> in Nigeria. This past February taking the turn into the next decade and an agreement that includes a commitment by Ericsson in Nigeria.

<unk> thousand 950, new tenancies over the next five years and it's front loaded over the next two we are very excited about the potential of this mutually beneficial partnership.

Sam Darwish: We are very excited about the potential of this mutually beneficial partnership. Shifting to governance progress, in January of this year, we announced a settlement agreement with Vandel in relation to the public dispute, which you are aware of, reflecting a commitment to strong corporate governance and constructive shareholder engagement. The text of the proposed amendment to the Articles of Association will be made available to shareholders before the next AGM.

Shifting to governance progress in January of this year, we announced a settlement agreement with bank debt in relation to the public dispute, which you are aware all reflecting our commitment to strong corporate governance and constructive shareholder engagement.

The text of the proposed amendment to the articles of association will be made available to shareholder before the next AGM.

Sam Darwish: On stock liquidity, there has been more progress here. We have removed all lockups on the pre-IPO shareholder. We also estimate that approximately 14% of our shares are now owned by post-IPO shareholders, compared to just 5% at the time of the IPO, and there was almost a 300% improvement in the float size. This is also evident in our average daily trading volume, which is now 574,000 shares, almost five times higher than what it was in May, 2022. During the quarter, we continued to buy shares under our two-year buyback program, with a total of $10 million worth of shares bought over the past two quarters. Now, I'd like to provide an update on Project Green.

Our stock liquidity more from this year.

Has removed all look up on the pre IPO shareholders. We also estimate approximately 14% of our shares are now owned by post IPO shareholder compared to just 5% at the time of the IPO and almost 300% improvement and flow side. This is also evident in our average.

Daily trading volume, which is now 574000 shares.

Five times higher than what it was in May 2022.

During the quarter, we continued to buy shares under our two year buyback program with a total of $10 million worth of shares both over the past two quarters.

I'd like now to provide an update on project Green.

Sam Darwish: For 2023, we spent $103 million on CAPEX versus guidance of $90 to $100 million, and achieved ALSCF savings of approximately $24 million versus guidance of $22 million. Overall, the project remains on target, as you can see by our results. We will provide a more comprehensive update on the impact Project Green and our carbon reduction roadmap is having when we publish our annual sustainability report, which we expect to be next quarter. Moving on to our balance sheet, we continue to feel comfortable with our liquidity position but also continue to increase our focus on cash generation and continue to evaluate and execute various ways to do so. As of year-end, we had $724 million of available liquidity, including our undrawn group RTF and the remaining undrawn portion of our group term loan.

For 2023, we spent $103 million of Capex versus our guidance our guidance of 90 to 100 million and achieved savings.

Saving approximately $24 million versus guidance of $22 million overall the project remains on target as you can see by our results.

<unk> provides a more comprehensive update on the impact project Green in our carbon reduction roadmap is heavy when we published our annual sustainability report, which we expect to be next quarter.

Moving onto our balance sheet, we continue to feel comfortable with our liquidity position, but also continued to increase our focus on cash generation and continues to evaluate and execute various ways to do such.

As of year end, we had $724 million of available liquidity, including our Undrawn group RTL and the remaining Undrawn portion of our group term loan we continue to actively pursue initiatives to shift more debt into local currency extend maturities and manage interest expense.

Sam Darwish: We continue to actively pursue initiatives to shift more debt into local currency, extend maturity, and manage interest expense. This was evident in our recent $116 million equivalent facility in Cote d'Ivoire. The proceeds of this local OPCO loan will refinance U.S. dollar obligations at the holding company level.

This was evident in our recent local Kevin E 116 million equivalents facility could be what the proceeds of this local opco long were refinanced U S dollar obligation the holding company level.

Sam Darwish: Also, as previously announced in November, we extended the maturity of our $300 million group RCF to October 2026. Leverage ended the year at 3.4 times, and as we had previously commented, was impacted by the NIRA devaluation in June. We expect leverage to further increase in 2024, given the additional NIRA devaluation, but we expect to remain within our target three to four times and continue to have an adequate liquidity position, which Steve will cover further in his section. And finally, on shareholder return, I would like to make the following statement. Despite the currency headwinds in Nigeria, we believe in the underlying strength of our business and believe our equity is undervalued, given Africa's perceived place in the global market. For example, Nigeria.

Also as previously announced in Nevada and in November we extended the maturity of our $300 million group Rcs to October 2026.

Leverage ended the year at three four times.

And we are and as we have previously commented was impacted by the naira devaluation in June we expect leverage to further increase in 2024, given the addition of another devaluation, but expect to remain within our target three to four times and continue to have an adequate liquidity position.

Which Steve will cover further in his section.

And finally on shareholder return I would like to make the following statement.

Despite the currency headwinds and Nigeria, we believe in the underlying strength of our business and believe our equity is undervalued given Africa persist place in the global market for example, Nigeria.

Sam Darwish: When I moved to Nigeria 25 years ago, the country had approximately 120 million people. Today, it has approximately 225 million people, a total population higher than Germany, France, or the UK, and is growing by 2.4% a year. That's 5 million people a year.

Most of my 25 years ago. The company had approximately 120 million people today. It has approximately 225 million people.

The total population higher than Germany, France, the UK and is growing by two 4% a year, that's 5 million people a year to put into perspective, that's almost the size of Colorado a year, but you also had the young energetic population within the majority of the population younger than the.

Sam Darwish: To put into perspective, that's almost the size of Colorado every year. Nigeria also has a young, energetic population with the majority of the population younger than the age of 20, as compared to developed markets. Hundreds of millions of people with no landline, poor roads, and poor transport infrastructure depend on their mobile phone for almost every aspect of their life.

<unk> 'twenty as compared to 18 developed market hundreds of millions of people with no landlines.

Those poor transport infrastructure depend on this on their mobile phone for almost every aspect of their lives. It has become an important as important as food or water or indication the trend in mobile phone.

Sam Darwish: It has become as important as food or water or education. The trend in mobile phone adaptability and usage is irreversible. And it's showing through our growth and also through the massive growth in the underlying numbers of our key customers in Nigeria, despite the forex headwind. Micro-conditions will tighten and loosen in cycles, but the growth in mobile usage is one way to the sky, and that's why we believe Nigeria's value is still significantly underestimated, especially in our sector. The value and long-term growth prospects of the Latin America business are also very strong. However, when we moved to LATAM during the COVID year, we had zero base.

City and usage.

And reversible and it's showing through our growth and also through the massive growth in the underlying number of our key customers in Nigeria, Despite the Forex headwinds Michael.

Macro conditions will tighten in Lewiston and cycle, but the growth in mobile usage is one way to the sky and that's why we believe Nigeria value still significantly underestimated, especially in our sector.

The value and long term growth prospects of the Latin America business are also very strong.

When we moved to Latam during the Covid, we had zero base.

Sam Darwish: Today, we have almost 8,000 towers and one of the largest cyber networks in Brazil with a business that generated $146 million in EBITDA in 2023. More than 800 new towers and 1.3 million more homes passed in 2023 alone. South Africa is growing. Sub-Saharan Africa is growing. We own and operate 40,000 towers across 11 markets, covering approximately 800 million people who need their phones for almost every basic aspect of their lives. And IHS sits at the heart of enabling such connectivity as a leader in its domain.

They we have almost 8000 tower and one of the largest fiber network in Brazil, with a business that generated $146 million in EBITDA and adjusted EBITDA in 2023 more than 800, new towers at $1 3 million more homes passed in 2020 to be alone.

South Africa is growing sub Saharan Africa is growing we own and operate 40000 towers across 11 markets covering approximately 800 million people who need their phones for almost every basic aspect of their lives and IHS.

At the heart of enabling connectivity as a leader on domain.

Sam Darwish: It is for these reasons that we believe IHS towers is underappreciated at our current valuation and that we have to consider ways of unlocking value for our shareholders. So, under the guidance of our board of directors, we have commenced work with our advisors, including JP Morgan, to evaluate strategic alternatives for the business across our portfolio and our capital allocation priorities. This exercise is intended to generate the best value for investors. We will provide an update on this as appropriate, including any potential action. And with that, I will turn the call over to Steve. Thanks, Sam. And hello, everyone.

It is for these reasons, we believe IHS underappreciated at our current valuation and then we have and that we have because of the way.

Locking value for our shareholders.

So under the guidance of our board of directors, we have commenced work with our advisors, including J P. Morgan.

Strategic alternatives for the business across our portfolio and our capital allocation priorities. This exercise is intended to generate the best value for investors. We will provide an update on this as appropriate including any potential actions.

And with that I will turn the call over to Steve.

Thanks, Tom and Hello, everyone turning to slide nine as Sam mentioned, we're pleased to show FY2023 in fourth quarter <unk> results were in line or better than expected against a challenging macro backdrop in Nigeria throughout the year. The business has shown its resilience in FY2023 posting good results, but it's clearly not immune to such significant.

Steve Howden: Turning to slide nine, as Sam mentioned, we're pleased to show our FY23 and FQ23 results were in line or better than expected against a challenging macro backdrop in Nigeria throughout the year. The business has shown its resilience in FY23, posting good results, but it's clearly not immune to such significant FX headwinds as we've seen in 2023 and continue to see in Nigeria in the early part of 2024. On slide 9, Tows and Tenants are up by 1% and 2%, respectively, year over year, while Lease Amendments increase by a double-digit percentage. On a reported basis, in the quarter, revenue declined and adjusted EBITDA increased modestly, both metrics impacted by the devaluation of the NIRA in 2023.

FX headwinds as we've seen in 2023 and continue to see in Nigeria in the early part of 2024.

On slide 9000 tenants are up by 1% and 2% respectively year over year, while lease amendments increased by double digit percentage.

On a reported basis in the quarter revenue declines and adjusted EBITDA increased modestly both metrics impacted by the devaluation in the naira in 2023.

Steve Howden: Specifically, in Q4, revenue declined by 3.1% but adjusted EBITDA increased by 0.6% while ALSCF increased 22%. For the full year, our revenue grew by 8%, adjusted EBITDA by 10%, and ALFCF by 19%, all on a reported basis. The level of CapEx investment decreased by 33% in the fourth quarter and 7.5% for the year, largely due to lower capital expenditure for our Nigeria and SSA segments, partially offset by an increase in LATAM, all of which I'll discuss shortly.

Specifically in Q4 revenue declined by three 1%, but adjusted EBITDA increased by <unk>, 6%, while <unk> increased 22%.

For the full year, our revenue grew by 8% adjusted EBITDA by 10% and ILS, yet by 19% on a reported basis.

Our level of Capex investment decreased by 33% in the fourth quarter and seven 5% for the year largely due to lower capital expenditure from Nigeria, and SSA segments, partially offset by an increase in Latam all of which I'll discuss shortly.

Steve Howden: And finally, our consolidated net leverage ratio increased to 3.4 times following the NARA devaluation, albeit still within our target 3 to 4 times range. Slide 10 shows the components of our 8.4% reported consolidated revenue growth for the full year 2023. Organic revenue growth of 36.9% of the year was driven primarily by FX resets, CPI escalations, and new lease amendments.

And finally, our consolidated net leverage ratio increased to three four times following the naira devaluation, albeit still within our target three to four times range.

Slide 10 shows the components of our eight 4% reported consolidated revenue growth for the full year 2023.

Organic revenue growth of 36, 9% for the year was driven primarily by FX resets CPI Escalations and new lease amendments power.

Steve Howden: Power-related revenue, fiber, new co-location, and new sites also contributed to our organic growth in 2023. On the right, you can see the organic growth rates of each of our segments for the year, with Nigeria delivering 47% organic growth, including a large impact from FX reset. Inorganic growth for FY2023 was 2.9%, primarily driven by the four-year benefit of the MTNSA and GPS SP5 acquisitions and the fifth and sixth stages of the Kuwait acquisition. Inorganic growth will be immaterial in 2024, given we are now beyond the 12 month anniversary of the most meaningful recent acquisitions we did in South Africa and Brazil in 2022. Turning to our consolidated revenue growth for the quarter, you can see how the continued devaluation turned a quarter of strong organic growth into a 3.1% decline. The Naira devalued 15% in Q4, from 776 Naira to the dollar at the beginning of the quarter to 912 Naira to the dollar at the end of the fourth quarter.

Power related revenue five new co location and new sites also contributed to our organic growth in 2023.

On the right you can see the organic growth rates in each of our segments for the year with Nigeria, delivering 47% organic growth, including a large impact from FX resets.

Inorganic growth for FY 2023 was two 9% primarily driven by the full year benefit of the MTA NSA and GTS SP, five acquisitions, and the fifth and sixth stages of the Kuwait acquisition.

Inorganic growth will be immaterial in 2024, given we are now beyond the 12 month anniversary. It's a nice meaningful recent acquisitions, we did in South Africa, and Brazil in 2022.

Turning to our consolidated revenue growth for the quarter you can see how the continued devaluation tend to quarter strong organic growth into a three 1% decline.

The naira devalues, 15% in Q4 from 776 nights the dollar at the beginning of the quarter to 912 naira to the dollar at the end of the fourth quarter yet.

Steve Howden: Yet organic revenue growth of 48.4% is driven primarily by FX resets that reflect the full quarter reset impact after the original June devaluation, TECI escalations and newly cemented fiber, power-related revenue, new co-location, and new sites also contributed to the organic growth in the quarter. The right side again shows the organic growth rates of each of our segments, where our Nigeria segment grew approximately 66%, including a large impact from F On slide 12, you can see our consolidated revenue, adjusted EBITDA, and adjusted EBITDA margins for the fourth quarter 2023 and the full year 2023. In Q4 2023, IHS generated $510 million in reported revenue, a 3.1% decline versus the prior year.

Organic revenue growth at 48, 4% driven primarily by FX resets that reflects the full quarter reset impact after the original June devaluation, CPI escalations on new lease amendments.

Fiber power laser revenue new co location and new sites also contributed to the organic growth in the quarter.

The right side again shows the organic growth rates of each of our segments, where our Nigeria segment grew approximately 66%, including a large impact from FX resets.

On Slide 12, you can see our consolidated revenue adjusted EBITDA and adjusted EBITDA margins for the fourth quarter 'twenty, three and the full year 'twenty three.

In fourth quarter 'twenty, three IHS generated $510 million in reported revenue of three 1% decline versus the prior year, while the night, while the naira devaluation drove the decline organic revenue growth at 48% reflects the contribution from our FX reset from CPI escalators as well as the strong secular growth trends of the bid.

Steve Howden: While the NIRA devaluation drove the decline, organic revenue growth of 48% reflects the contribution from our FX resets and CPI escalators, as well as the strong secular growth trends of the business. Fourth quarter 23 reported revenue includes a $25 million FX headwind versus FX rates of last quarter and a $16 million headwind when including all FX assumptions that were assumed in our guidance. For full year 2023, we delivered over $2.1 billion of revenue, an 8% increase while organic revenue increased by almost 37%. Aggregate inorganic revenue was $57 million, equating to 2.9%.

<unk>.

Fourth quarter <unk> 23 reported revenue included $25 million FX headwind versus FX rates of last quarter, and a $16 million headwind when including all FX assumptions that were assumed in our guidance.

For full year 2023, we delivered over $2 $1 billion of revenue and 8% increase while organic revenue increased by almost 7%.

Aggregate inorganic revenue was $67 million equating to 9% again, reflecting the acquisitions previously discussed.

Steve Howden: Again, reflecting the acquisitions previously, Non-recurring items also made up $48 million this year compared to $18 million the year before and partially distorts the comparison. Regarding Adjusted EBITDA and Adjusted EBITDA margins, in Q4'23, Adjusted EBITDA of $274 million increased by approximately 1% versus Q4'22, and Adjusted EBITDA margin was 53.8%, up 200 basis For the full year, Adjusted EBITDA was $1.1 billion, a 9.9% increase versus the prior year.

Nonrecurring items will say made up $48 million this year compared to $18 million the year before and partially distorts the comparisons.

Regarding adjusted EBITDA and adjusted EBITDA margins in Q4, 23, adjusted EBITDAR of $274 million increased by approximately 1% versus fourth quarter 2000, and adjusted EBITDA margin was 53, 8% up 200 basis points from the prior year.

For the full year adjusted EBITDA was $1 1 billion, a nine 9% increase versus the prior year.

Steve Howden: And Adjusted EBITDA margin was 53.3%, up 70 basis points from full year 2022. The year on year changes in adjusted EBITDA and adjusted EBITDA margin primarily reflect the increase in revenue we've already discussed, whilst the cost base was positively impacted by reducing power costs, but negatively impacted by FX-related impacts. As previously highlighted through Project Green, we continue to prioritise alternative sources of power to reduce our dependency on diesel.

Adjusted EBITDA margin was 53, 3% up 70 basis points from full year 2022.

The year on year changes in adjusted EBITDA and adjusted EBITDA margin, primarily reflect the increase in revenue we've already discussed whilst the cost basis positively impacted by reducing power costs, but net negatively impacted by FX related impacts.

As previously highlighted three project Green, we continue to prioritize alternative sources of pilots to reduce that dependency on diesel.

Steve Howden: On slide 13, we first review our Adjusted Levered Free Cash Flow, or ALFCF. In Q4'23, we generated ALFCF of $118 million, a 22% increase versus Q4'22, primarily due to a reduction in maintenance capex, lease and rent payments made, and withholding tax, partially offset by an increase in net interest paid. ALSCF's cash conversion rate increased to 43.1% versus 35.6% in the prior year's quarter. For the full year, we generated ALS-CF of $433 million, a 19.2% increase versus FY22, and our ALS-CF conversion rate was 38.2%, up from 35.2% in FY22. One-time items in each year impacted that comparison.

On Slide 13, we first review, our adjusted Levered free cash flow or Fcs.

In Q4, 2003, we generated <unk> $118 million or 22% increase versus key for 'twenty, two primarily due to a reduction in maintenance capex lease and rent payments made in withholding tax partially offset by the increase in net interest paid.

<unk> cash conversion rate increased to 43, 1% versus 35, 6% in the prior year's quarter for.

For the full year, we generated <unk> of $433 million or 19, 2% increase versus FY 'twenty two.

AOS get conversion rate was 38, 2% up from 35, 2% in FY 'twenty two.

One time items in each year impacted that comparison, however, the year on year increase in <unk> is primarily due to underlying business growth, we've already discussed as well as a reduction in maintenance capex.

Steve Howden: However, the year-on-year increase in ALS-DS is primarily due to the underlying business growth we've already discussed, as well as a reduction in maintenance. Turning to CapEx. In Q4'23, total CapEx was $131 million, which decreased 33% year-on-year, and full year 2023 CapEx of $586 million decreased 7.5% year-on-year.

Turning to Capex in Q4, 2003, total capex was $131 million, which decreased 33% year on year and full year 2023, capex of $586 million decreased seven 5% year on year.

Steve Howden: The decrease in full year 23 was primarily due to a lower CAPEX spend in Nigeria related to new site CAPEX and SSA related to refurbishment, but that was offset by higher CAPEX spend in LATAM related to new site build. In the latter part of the year, we started to pull back our capital allocation for growth capex in certain markets like Nigeria, which was one of the reasons that FY23 total capex of $586 million was lower than our $610 to $650 million capex guidance. More on this when we come to the FY24 guidance in a moment. Slide 14 looks at our returns and capital allocation. In FY23, we continued to focus on driving returns and delivered a return on invested capital of 14.6% versus 9.9% for the prior year.

The decrease in full year 'twenty three was primarily due to a lower capex spend in Nigeria relates to new site Capex and.

And SSA related to refurbishment, but that was offset by higher capex in Latam related to new site builds.

In the latter part of the year, we started to pull back on capital allocation for growth Capex in certain markets like Nigeria, which is one of the reasons that FY2023 tied to capex of $596 million was lower than a $610 million to $650 million Capex guidance.

More of this when we come to the FY 'twenty four guidance shortly.

Slide 14 looks at our returns and capital allocation.

2023, we continue to focus on driving returns and delivered a return on invested capital of 14, 6% versus nine 9% in the prior year.

Steve Howden: Our improved 2023 ROIC reflects, amongst other things, growth in cash flow, a first full year contribution from the MTN South Africa and GTS SP5 acquisitions completed in 2022, the first year in numerous years when we have not deployed capital on M&A transactions, and, of course, the impact of the Naira devaluation. In terms of capital allocation, you can see that a significant portion of our spend in FY23, or $352 million, was related to discretionary CapEx that excluded new sites, followed by maintenance or non-discretionary CAPEX and new site CAPEX, where we are a leading builder of new sites in Brazil. We also allocated $10 million towards our share repurchase program that was authorized in August 2023. The $352 million discretionary CapEx, excluding new sites, was largely spent on fiber rollout, Project Green, augmentation for co-location and lease amendments, and other cost-saving initiatives. Turning to the segment review on slide 15, the first walkthrough of the Nigerian business. When the new president was sworn in last May, we saw swift action to unify the multiple exchange rates and end the petrol subsidy.

Our improved 2023 ROIC reflects amongst other things Greg cash flow. The first full year contribution from the MTN, South Africa, and <unk> acquisitions completed in 2022 for the first year and numerous he is when we have not deployed capital on M&A transactions and of course, the impact of the naira devaluation.

In terms of capital allocation, you can see that a significant portion of that spend in FY2023 or $352 million.

It was related to discretionary capex that excluded new sites, followed by maintenance or non discretionary capex and new site Capex, where we are a leading builder of new sites in Brazil, but we also allocated $10 million towards our share repurchase program that was authorized in August 2023.

The $352 million discretionary capex, excluding new sites was largely spent on fiber rollout project green augmentation for Colocation and lease amendments and other cost saving initiatives.

Turning to the segment review on Slide 15, first walk through on Nigeria business.

When the new President was sworn in last May we saw Swift action to unify multiple exchange rates and then the Petro subsidy and Nigeria and macro environment. However, it remains complex and while we're still encouraged by the actions taken by the new government. These additional steps taken in January had a meaningful negative impact on the naira, which obviously is not showing in these results today, but you.

Steve Howden: The Nigerian macro environment, however, remains complex, and while we're still encouraged by the actions taken by the new government, the additional steps taken in January have had a meaningfully negative impact on the Naira, which obviously is not showing in these results today, but you will see it in our 2024 guidance. We remain in close contact with our key customers, regulators, our vendors, and our local banking partners to continue to position IHS best. FX reserves decreased to $32.9 billion in Nigeria at the end of 2023 from $37.1 billion in 2022.

We'll see it in our 2020 for guidance.

We remain in close contact with our key customers regulators abandon does not local banking partners to continue to best position IHS.

FX reserves decreased to $32 $9 billion in Nigeria at the end of 2023 from $37 1 billion in 2022.

More recently, the Nigerian Monetary policy Committee raised interest rates by 400 basis points to $22, 75% and move designed to curb inflationary and FX pressures.

Meanwhile, the price of oil and gas oils have decreased recently.

Looking at <unk> gas oil it was $792 per ton in Q4 of 2003, and that's down from $911 per ton in Q3 of 'twenty three.

Steve Howden: More recently, the Nigerian Monetary Policy Committee raised interest rates by 400 basis points to 22.75% and moved to curb inflationary and FX pressures. Meanwhile, the price of both oil and ice gas oil has decreased recently. Looking at ice gas oil, it was $792 per tonne in Q4 of 23, and that's down from $911 per tonne in Q3 of 22. Moving to real GDP growth, it expanded by 3.5% in the quarter, bringing the full-year 2023 growth rate to 2.7%. Inflation jumped to 28.9% this past December versus 21.3% in December 2022, bringing the full year 23 average CPI rate to 24.7%.

Leading to real GDP growth expanded by three 5% in the quarter, bringing the full year 2023 rates rates of two 7%.

Inflation jumped to 28, 9% this past December versus 21, 3% in December 2022, bringing the full year 'twenty three average CPI rate to 24, 7%.

For IHS key for 'twenty, three revenue in Nigeria, or $321 million decreased 10% year on year on a reported basis, reflecting the devaluation in the quarter the increased 66% organically.

Organic growth was driven primarily by FX resets and Escalations.

The negative FX impact was $267 million or 75, 3% due to the devaluation.

At tower and tenant count decreased three 5% and 8% respectively versus Q4, 2002, which continue to reflect the planned decommissioning that occurred in Q1 2023 with no impact on revenue.

Steve Howden: For IHS, Q4'23 revenue in Nigeria of $321 million decreased 10% year-on-year on a reported basis, reflecting the devaluation in the quarter, but it increased 66% organically. Organic growth was driven primarily by SFX resets and escalation. The negative effects impact was $267 million or 75.3% due to the devaluation.

Our colocation rate Consequently, improve to 159 times up from 154 times in Q4 2002 and.

And lease amendments continue to be a strong driver of growth increasing 12, 5% year on year is that customers added additional equipment to our sites, particularly five G upgrades.

Q4, 'twenty three segment adjusted EBITDAR in Nigeria was $200 million, a 3% decrease from a year ago. While segment. Adjusted EBITDA margin was up 430 basis points to 62, 3%, primarily reflecting a reduction in cost of sales, mostly coming from diesel savings.

Steve Howden: Our tower and tenant count decreased 3.5% and 0.8%, respectively, versus Q4-22, which continue to reflect the planned decommissioning that occurred in Q1-2023 with no impact on revenue. Our co-location rate consequently improved to 1.59 times, up from 1.54 times in Q4-22, and lease amendments continue to be a strong driver of growth, increasing 12.5% year on year as our customers added additional equipment to our sites, particularly 5G upgrades Q4'23 segment adjusted EBITDA in Nigeria was $200 million, a 3% decrease from a year ago, while the segment adjusted EBITDA margin was up 430 basis points to 62.3%.

And our sub Saharan African segment thousand tenants increased by one 5% and 22, 6% respectively. This is key for 'twenty.

Revenue increased by five 6% of which organic revenue grew 12% driven primarily by Escalations in FX resets.

Segment, adjusted EBITDA decreased by six 3%, which primarily reflects an increase in cost of sales, partially offset by the increase in revenue.

Segment, adjusted EBITDA margin decreased to 53% from 56, 6% in Q4 2022, as a result of higher power generation costs permitting fees and done in diesel costs.

We continue to monitor the macro environment in South Africa, particularly the ongoing power load shedding by the national utility, which did moderate versus the previous quarter.

Steve Howden: Primarily reflecting a reduction in the cost of sales, mostly coming from diesel safety. In our Sub-Saharan African segment, towers and tenants increased by 1.5% and 2.6%, respectively, versus Q4 2022. Revenue increased by 5.6%, of which organic revenue grew 12% driven primarily by escalations and FX receivables. Segment-adjusted EBITDA decreased by 6.3%, which primarily reflects an increase in cost of sales, partially offset by the increase in revenue.

We also continue to evaluate our power managed service offerings.

In our Latam segment thousand tenants grew by nine 3% and six 6%, respectively. Thus Q4, 'twenty revenue increased by 24% of which organic revenue growth was 17% driven primarily by an increase in cyber escalations and those new sites.

Segment, adjusted EBITDA increased by 31% leading to a 75, 6% segment adjusted EBITDA margin 400 basis point increase versus Q4 2022.

Steve Howden: Segment adjusted EBITDA margin decreased to 50.3% from 56.6% in Q4 2022 as a result of higher power generation costs, permit and fees, and diesel costs. We continue to monitor the macro environment in South Africa, particularly the ongoing power load shedding by the national utility, which did moderate versus the previous quarter. We also continue to evaluate our power managed service offering. In our LATAM segment, housing tenants grew by 9.3% and 6.6%, respectively, versus Q4 2022. Revenue increased by 24%, of which organic revenue growth was 17%, driven primarily by an increase in fiber escalations and those new sites. Segment-adjusted EBITDA increased by 31%, leading to a 75.6% segment-adjusted EBITDA margin, a 400 basis point increase versus Q4 2022. In Brazil, our second largest market with 7,663 towers, macro conditions were largely positive In MENA, towers and tenants grew by 9.2% and 9.7%, respectively, while revenue increased by 13%, including 6% organic revenue growth that was driven primarily by new sites and escalation. Segment adjusted EBITDA grew by nearly 80% mainly as a result of the revenue growth and a decrease in cost of sales. In Q4'23, the segment adjusted EBITDA margin increased to 73.5%.

In Brazil, our second largest market with 7663 towers macro conditions were largely positive.

X rays margin strengthened interest rates came down and installation stayed relatively flat.

In Mena tenants grew by nine 2% at nine 7%, respectively, while revenue increased by 13%.

Including 6% organic revenue growth and that's driven primarily by new sites some escalations SEC.

Segment adjusted EBITDA grew by nearly 80% mainly as a result of the revenue growth and a decrease in cost of sales.

The key for 'twenty three segment adjusted EBITDA margin increased to 73, 5%.

On to slide 16, and I'll briefly highlight Kpis as of December 31, Tao countless 40075 up one 1% from the end of 2022.

Given primarily by ongoing new sites in Latam and some in Nigeria as you can see in the chart on the top right collectively we built more than 1300 towers during the year exceeding our guidance of approximately 1250.

Titled Tenants grew 2% with the co location rate of 149 times up slightly versus last year and lease amendments continue to be a significant factor about growth, particularly in our Nigerian segment, given the historic <unk> and now increasing fight the activity we are seeing.

Lease amendments increased by almost 16% year on year.

Moving on to Slide 17, we look at our debt profile and related items at December 31, 2023, we had approximately $4 $1 billion of external debt and <unk> 16 lease liabilities.

Steve Howden: On to slide 16, and I'll briefly highlight our KPIs. As of December 31, our tower count was 40,075, up 1.1% from the end of 2022, driven primarily by ongoing new sites in Latam and some in Nigeria. As you can see in the chart on the right, collectively, we built more than 1,300 towers during the year, exceeding our guidance of approximately 1,250. Total tenants grew 2%, with the co-location rate of 1.49 times, up slightly versus last year. And lease amendments continue to be a significant factor of our growth, particularly in our Nigerian segment, given the historic 4G and now increasing 5G activity we are seeing. Lease amendments increased by almost 16% year-on-year.

Of the $4 1 billion of debt $194 billion represent a bond financings and other indebtedness increased $370 million that was that had been drawn down from the $500 million three year bullet tagline at IHS holding limited level.

We've undertaken various balance sheet initiatives to extend maturities manage interest rate expense swap dollar obligations into local currency, where possible and add flexibility to our capital structure.

As mentioned in October we reduce the available undrawn commitments under the term line by $100 million to $130 million and extended the availability paired with Nissan drove balanced to April 2024.

We've reduced the available undrawn commitments by another 70 million earlier. This month in March as a result of pushing this USD exposure down into Cote d'ivoire market with $116 million equivalent term loan that matures in December 2028.

Steve Howden: Moving on to slide 17, we look at our debt profile and related items. At December 31, 2023, we had approximately $4.1 billion of external debt and IFRS 16 lease liabilities. Of the $4.1 billion of debt, $1.94 billion represents our bond financings, and other indebtedness includes $370 million that has been drawn down from the $500 million three-year bullet term loan at IHS Hldg Limited.

In November we extended the group has yet maturity from March 25 to October 2026, which continues to have a 300 billion capacity on it Andrew.

Most recently, we signed a $270 million bilateral lines to refinance essentially all of our less in Trinidad in Nigeria.

It will extend the maturity of these obligations reduced interest expense by approximately 300 basis points and related approximately $115 million equivalent of cash collateral previously held against these letters of credit.

As you can imagine we are pleased with complete these initiatives, which further de risk the balance sheet and increased our financial flexibility.

Steve Howden: We've undertaken various balance sheet initiatives to extend maturities, manage interest rate expense, swap dollar obligations into local currency where possible, and add flexibility to our capital structure. As mentioned, in October, we reduced the available undrawn commitments under the term loan by $100 million to $130 million and extended the availability period of this undrawn balance to April 2024. We've reduced the available undrawn commitments by another $70 million earlier this month in March as a result of pushing this USD exposure down into the Cote d'Ivoire market with a $116 million equivalent term loan that matures in December 2028. In November, we extended the group RCF maturity from March 25 to October 2026, which continues to have a 300 million capacity and is undrawn.

Cash and cash equivalents decreased $294 million at December 31 in terms of where that cash is held approximately 12% was held in Iraq, Nigeria business.

Moreover, in 2023, we upstream to total of $65 million from Nigeria alone at an average rate of approximately $699 699 iron to the dollar.

$207 million at rates of approximately 550 million naira in 2022, despite the USD shortages in the second half of 'twenty three.

More positively we see an increase in daily FX 10 April USDA availability since government actions taken in January 2024, but we do caution it remains to be determined as such an increase will be sustained.

Steve Howden: Most recently, we signed a $270 million bilateral loan to refinance essentially all of our letters of credit in Nigeria. This will extend the maturity of these obligations, reduce the interest expense by approximately 300 basis points, and release approximately $115 million equivalent of cash collateral previously held against these letters of credit. As you can imagine, we are pleased to have completed these initiatives, which further de-rest the balance sheet and increase their financial flexibility. Cash in cash equivalents decreased $294 million at December 31.

Consequently from all these moving elements at the end of the fourth quarter 'twenty three our consolidated net debt was approximately $3 $8 billion and we had a consolidated net leverage ratio of three four times.

No 0.2 times year on year.

In light of the continued Nigeria devaluation, we do expect leverage to increase over the coming quarters. However, our debt metrics are expected to remain within our target three to four times net leverage ratio.

Now moving to slide 18, and we are introducing 2024 guidance that includes revenue in the range of one seven to $1 $73 billion.

Adjusted EBITDA in the range of 935% to $955 million.

Steve Howden: In terms of where that cash is held, approximately 12% was held in Naira at our Nigeria business. Moreover, in 2023, we upstreamed a total of $65 million from Nigeria alone at an average rate of approximately 699 naira to the dollar versus $207 million at an average rate of approximately 550 million naira in 2022, despite the USD shortages in the second half of 2023. More positively, we've seen an increase in daily FX turnover or USD availability since government actions taken in January 2024, but we do caution that it remains to be determined if such an increase will be sustained. Consequently, from all these moving elements, at the end of the fourth quarter of 2023, our consolidated net debt was approximately $3.8 billion, and we had a consolidated net leverage ratio of 3.4 times, up 0.2 times year on year.

<unk> in the range of $285 million to $305 million in total capex in the range of $330 million to $370 million.

A few points I'd like to make here number one revenue guidance includes an approximate 17 $107 million reduction compared to 2023 as a result of an expected change in our accounting methodology on power pass through revenue in South Africa, which will likely be accounted for as net revenue going forward rather than gross revenue and gross power.

Cost.

This however will have no impact on adjusted EBITDA or FCS as historically, we have recognized an equal amount of power comes from power revenue.

Number two I'll speak more about FX rates in the mainland, but excluding the change in how we recognize that power pass through in South Africa.

<unk> year on year reduction in financials is entirely the result of the naira devaluation and as Sam mentioned is expected to be a $575 million a year on year headwind to revenue after adjusting for the impact of FX resets.

Steve Howden: In light of the continued Nigerian devaluation, we do expect leverage to increase over the coming quarters. However, our debt metrics are expected to remain within our target three to four times net leverage ratio. Now moving to slide 18, we're introducing 2024 guidance that includes revenue in the range of $1.7 to $1.73 billion, adjusted EBITDA in the range of $935 million to $955 million, ALSDS in the range of $285 to $305 million, and total CAPEX in the range of $330 to $370 million. A few points I'd like to make here. Number one, revenue guidance includes an approximate $17.17 million reduction compared to 2023 as a result of an expected change in our accounting methodology on power pass-through revenue in South Africa, which will likely be accounted for as net revenue going forward rather than gross revenue and gross power. This, however, will have no impact on it just at EBITDA or ALSDF, as historically, we've recognized an equal amount of power costs and power revenue.

And lastly, you may have seen in our disclosures, we have signed an agreement to sell our Korea business to SBA at while immaterial given the small size of the business of 61 towers. Our guidance assumes that this transaction closes at the end of Q2 2024.

You'll also see that Capex is expected to come down significantly year on year as we increase our focus on cash generation, while still upholding the goal to maintain double digit organic revenue growth, which increased 49% in 2024.

This does include the remaining small portion from project green of approximately $10 million.

And for the year, we expect to build approximately 850 towers, including approximately 600 in Brazil.

And turning to page on slide 19 on the left you can see revenue by reporting currency for Q4, and the year, whereas on the right hand side, we provide the breakout of revenue based on contract split.

At the bottom of the slide shows the annual average FX rate assumptions used in our 2020 for guidance and for the year. We are assuming in guidance 1610 naira to the dollar.

Steve Howden: I'll speak more about FX rates in a moment, but excluding the change in how we recognize that power pass-through in South Africa, the expected year-on-year reduction in financials is entirely the result of the Naira devaluation. And as Sam mentioned, it's expected to be a $535 million year-on-year headwind to revenue after adjusting for the impact of FX research. And lastly, as you may have seen in our disclosures, we have signed an agreement to sell our Peru business to SBA. While immaterial, given the small size of the business of 61 towers, guidance assumes that this transaction closes at the end of Q2 2024. You'll also see that CapEx is expected to come down significantly year on year, as we increase our focus on cash generation, while still upholding the goal to maintain double-digit This does include a remaining small portion for Project Green of approximately $10 million. And for the year, we expect to build approximately 850 towers, including approximately 600 in Brazil.

Which includes 1315 in Q1 of 2024 based on actual through February and 1815 on average in Q4 of 2024.

And then finally on slide 20, we provide the estimated full year financial impact of theoretical 10% devaluation of the naira would have on our financials.

While our 2024 guidance already assumes an average and an average annual 1610 naira to the dollar for the full year.

With the naira right getting to 1850 by December 2024 here, we are showing the impact of a 10% devaluation beyond what we've assumed in the guidance.

Figures in the middle of the page, including the approximate $40 million to $45 million and $20 million to $25 million impact to revenue and adjusted EBITDA, respectively provide a sense of what the 12 month run rate impacts would be using a 2024 expectations.

However, as you'll see on the right hand side the illustration in the middle of the page excludes an incremental approximate 15, one $5 million impacts that could impact the course, the devaluation actually occurs.

Assuming the devaluation was to occur at the beginning of the quarter.

This represents the maximum lag that could occur between the devaluation and when most of that FX resets would start to kick in the next quarter.

Steve Howden: Then turning the page on slide 19, on the left, you can see revenue by reporting currency for Q4 of the year, whereas on the right-hand side, we provide the breakout of revenue based on contract split. The bottom of the slide shows the annual average FX rate assumptions used in our 2024 guidance. For the year, we're assuming in guidance $1,610 Naira to the dollar, which includes $1,315 in Q1 of 2024, based on actual through February, and $1,815 on average in Q4 of 2024.

And as a reminder, the vast majority of that resets quarterly.

This now brings us to the end of our formal presentation and we thank you for your time today and operator. Please now open the line for questions.

Thank you as a reminder to those on the phones. Please press star one to raise your hand.

Now pause briefly while we weren't just a question in the Q&A roster.

Our first question comes from the line of Michael Elliot from TD Cowen. Please go ahead.

Great. Thanks for taking the questions a few if I may to.

To start off relating to the valuation of strategic alternatives I'm curious could you give us a sense for the intended scope of these alternatives and specifically what I mean by that is is the intention to consider.

Steve Howden: And then finally, on slide 20, we provide the estimated full-year financial impact a theoretical 10% devaluation in the NIRA would have on our financials. While our 2024 guidance already assumes an average annual 1,610 Naira to the dollar for the full year, with the Naira rate getting to 1,850 by December 2024, here we've shown the impact of a 10% devaluation beyond what we've assumed in the guidance. The figures in the middle of the page, including the approximate $40-$45 million and $20-$25 million impact to revenue and adjusted EBITDA, respectively, provide a sense of what the 12-month run rate impacts would be using our 2024 expectations. However, as you'll see on the right-hand side, the illustration in the middle of the page excludes an incremental approximate $15.15 million impact that could impact the course of the devaluation actually occurs, assuming the devaluation was to occur at the beginning of the course. This represents the maximum lag that could occur between the devaluation and when most of the FX resets would start to kick in the next quarter.

The sale of the entire business or just perhaps parts of the business.

And second what makes now the right time to explore these alternatives and would you be exploring these alternatives. If it were not for the devaluation that we saw in Iraq.

A follow up question after that but any color on beef.

Great. Thank you.

Hi, Michael This is Sam.

We believe the business is undervalued.

It's not a direct reflection of where the naira as the business as you've seen is reporting solid numbers and it had been reporting solid numbers quarter. After quarter of course, the naira devaluation situation well will have an impact but again it is within manageable.

Our minutes.

The strategic.

Evaluation is largely because we feel the frustration of shareholders. We believe that markets have not given IHS the necessity credit when it comes to our value and where our valuation should be so it is our duty in addition to running the business.

Well in a good and solid matter. It is our duty to leave no stone unturned basically to try and unlock value for shareholders now in terms of details. Unfortunately, I won't be able to go into detail with comments that we.

Steve Howden: And as a reminder, the vast majority of our resets are quarterly. This now brings us to the end of our formal presentation, and we thank you for your time today. Operator, please now open the line for questions. Thank you. As a reminder to those on the phones, please press star 1 to raise your hand.

We're doing that.

That work at the moment together with our advisors. The JP Morgan included and we will communicate it as and when appropriate.

Great. Thanks for the color there.

Just as a follow up question.

Michael Elias: We will now pause briefly while we register questions in the Q&A roster. Our first question comes from the line of Michael Elias from TD Curran. Please go ahead.

With the volatility that we've seen in <unk>.

How would you describe the ability and need to upstream cash in 2024.

Hi, Michael I would say so.

So I think youre right volatility is a good word to describe it.

2023 was challenging.

Sam Darwish: Great, thanks for taking the questions. A few, if I may. You know, to start off, relating to the evaluation of the strategic alternatives, I'm curious, could you give us a sense for the intended scope of these alternatives? And specifically, what I mean by that is, is it intention to consider the sale of the entire business or just perhaps parts of the business? And second, what makes now the right time to explore these alternatives? And would you be exploring these alternatives if it were not for the devaluation that we saw in the NIRA? I have a follow-up question after that, but any color on these alternatives would be great.

Sourcing us dollars and therefore extremely well that we did we did get $65 million out I don't know in 2023.

From a 2024 perspective.

We have seen more liquidity in the markets January February and March to date.

That is certainly a positive.

I would say that's off the back of a number of moves by the Nigerian government Central Bank monetary policy et cetera around the currency devaluation, but looks like interest rate increases.

So that's the positive but.

But obviously we have to.

The caution that we will see you can say to you for a period of time.

Sam Darwish: Thanks. Hi Michael, this is Sam. We believe the business is undervalued, so it's not a direct reflection of where the NIRA is. The business, as you've seen, is reporting solid numbers, and it's been reporting solid numbers quarter after quarter. Of course, the NIRA devaluation situation will have an impact, but again, it is within manageable limits. The strategic evaluation is largely because we feel the frustration of shareholders. We believe that markets have not given IHS the necessary credit when it comes to our value and where our valuation should be. So it is our duty, in addition to running the business well in a good and solid manner, to leave no stone unturned, basically to try and unlock value for shareholders. Now, in terms of details, unfortunately, I won't be able to go into details. We've begun doing that work at the moment together with our advisors, JP Morgan included, and we will communicate as and when appropriate. Great, thanks for the color there, Sam.

Just a couple of let's call it false stores in the last nine or 10 months.

Our reforms.

So we are again sitting at a point, where we have there's a positive outlook.

In terms of U S dollar liquidity, but let's see.

We want to see more and more of the liquidity and then we'll we'll be upstream.

Great. Thanks for the color.

Thank you. Our next question comes from the line of Richard <unk> from Jpmorgan. Please go ahead.

Hi, I wanted to ask about the Latin America business.

Where should we expect that percentage of revenue to go to by the end of this year and maybe longer term given the growth you're seeing there how big of a business could that get.

Hi, Richard.

Second question I think.

One thing that I always say.

The overall contribution mix at that.

The segment has been growing at sort of between 15 and 17%.

Steve Howden: Just as a follow-up question, you know, with the volatility that we've seen in NYRA, how would you describe the ability and need to upstream cash in 2024? Thanks. Hey Michael, Steve.

Year on year, and so it continues to grow nicely and revenue for the full year.

Was that.

$7 million.

This is becoming a very significant component of that.

We will mix and given the opposite direction, if you like of Nigeria the devaluation.

Steve Howden: So you're right, volatility is a good way to describe it. 2023 was challenging, no doubt, in terms of sourcing US dollars and therefore upstreaming, although we did get $65 million out earlier in 2023. I think from a 2024 perspective that we have seen more liquidity in the markets in January, February, and March to date. So that is certainly positive. I would say that's on the back of a number of moves by Nigerian governments, central bank monetary policy, etc., around the currency valuation but also interest rate increases.

It comes an increasing percentage of IHS by the fiber described in Nigeria is developing that forgetful a bit smaller so we haven't bought a set target on it right now. Despite this with lepton is to grow it organically.

The short term.

But obviously, that's a key element of that.

Will you make up in the business, we want to continue growing organically okay.

Great and I guess a little bit.

More color on the mix between the tower growth in fiber growth. It seems like both are growing at a pretty healthy pace.

Oh, Yes, sorry go ahead.

Right.

So we don't actually split out the financials in too much detail on the five business, but as you probably know as Matt prior discussion there is a.

Steve Howden: So that's the kind of thing that's positive. But obviously, you know, we have to caution that we want to see it continue for a period of time. We've seen a couple of, let's call them false dawns, in the last nine or 10 months in terms of reforms.

Disclosure on it buried in the 20-F and the fiber business grew 30% last year.

Steve Howden: So we're again sitting at a point where we hope there's a positive outlook, certainly in terms of US dollar liquidity, but let's see. We want to see more dollar liquidity, and then we'll be upstream. Great. Thanks for the call.

From a renewal perspective, and the towers, just a little bit less than that but still growing.

Thanks, John.

Great. Thank you.

Thank you as a reminder, if you'd like to ask a question. Please press the star followed by the one on your telephone keypad.

Richard Choe: Thank you. Our next question comes from the line of Richard Choe from J.P. Morgan. Please go ahead.

Our next question comes from the line of Eric <unk> of Wells Fargo. Please go ahead.

Steve Howden: Hi Richard, Steve. I wanted to ask you about the Latin America business. Where should we expect that percentage of revenue to go by the end of this year and maybe longer term given the growth you're seeing there? How big of a business could that get?

Great. Thank you for taking the question.

I wanted to touch on the MTN agreement to move to 5000 sites I know its tied up in the courts right now, but kind of any update on your base case and how many sites you think could eventually.

Steve Howden: So good question. I think, you know, one thing to know, obviously, in terms of the overall contribution mix is that LATAM as a segment has been growing at sort of between 15 and 17% year on year. And so it continues to grow nicely. Revenue for the full year was over $200 million.

Can move to your competitor in that market.

Okay.

Hi, Eric This is Luke.

We've been public about our view here and we remain consistent.

It's a very very very tall order to be able to move equipment covering 20 million users also.

Steve Howden: So, you know, that business is becoming a really significant component of our overall mix. And given the opposite direction, if you like, of Nigeria, given the devaluation, it becomes an increasing percentage of IHS by the fact that it's growing and Nigeria is devaluing and, therefore, getting a little bit smaller. So we haven't got a set target for it right now. The focus with LATAM is to grow it organically for the short term.

On 2500 towers that most of which do not exist in a country like Nigeria, where power infrastructure permits renovation is all an uphill battle I mean that conversation. We've had in October today, we are in February or March actually with another maybe eight 910.

Steve Howden: But obviously that's a key element of our value makeup. And, you know, it's a business we want to continue growing organically where we can. Great, and I guess a little bit more color on the mix between the tower growth and the fiber growth. It seems like both are growing at a pretty, Yeah, both are growing at a healthy pace.

Left before the expiry and.

No significant work has occurred on the towers largely because of some of the things. We just mentioned so that remains a very very tall order for us, but again I mean MTN is a partner of ours. We've been we've been we've been we've been in partnership for more than two decades.

Steve Howden: So we don't actually split out the financials in too much detail on the fiber business, but as you probably know, from our prior discussions, there is an element of disclosure on it buried in the 20th. The fiber business grew at 30% last year, from an overall perspective, and the towers, just a little bit less than that, but still growing, still growing strongly. Great, thank you.

Discussions are always ongoing.

Okay, I appreciate that and just one follow up.

Your guide this year kind of implies 55% EBITA margin, a nice uptick versus last year. So.

Anything you could walk us through in terms of areas Youre seeing cost efficiencies between lower diesel cost project Green.

Eric Thomas Luebchow: Thank you. As a reminder, if you'd like to ask a question, please press the star followed by the number on your telephone keypad. Our next question comes from the line of Eric Luebchow on Wells Fargo. Please go ahead.

And then kind of the longer term path to get to 60% EBITDA margins, how do you see that.

Transforming over the next few years.

Hi, Eric.

A few things on the cost side.

Yes, Youre right. The guide implies an EBITDA margin sorry.

Sam Darwish: Great, thank you for taking the question. Um, I wanted to touch on, you know, the MTN agreement to move two and a half thousand sites, which I know is tied up in the courts right now, but kind of any update on your base case and how many sites you think could eventually get moved to your competitor in that market. Hi Eric, this is Sam.

Couple of percentage points higher than where we finished 2023.

What's driving that a lot thats driving that is around the cost actions that we've been taking.

Is it a variety of different areas at a pretty nice up project Green, which has been driving down diesel consumption and therefore, it will cost and.

Within Nigeria, a particular puts and takes in other markets as well, but mainly in Nigeria.

Sam Darwish: Look, we've been public about our view here, and we remain consistent. I think it's a very, very, very tall order to be able to move equipment covering 20 million users or so on 2,500 towers, most of which do not exist in a country like Nigeria, where power, infrastructure, permits, and regulation are all an uphill battle. I mean, that conversation we had in October. Today, we are in February or March, actually, with another maybe eight, nine, or 10 months left before the expiry date.

And then part of it is.

Actions, where the macro is going really well.

It really isn't that Nike markets like Nigeria, and we've been at.

Looking at our cost structure, and where we can be more efficient, whether it's an operating business and more successful in intelligent ways.

Cost side, there's a lot of focus from us right now.

<unk> 2024 around cash generation.

Do you see that embedded in our lower Capex guidance significantly lower Capex guide for 2024 versus even a couple of prior years.

Our capex spend and it is also evident in our margins in terms of where we're looking to drive efficiency that would cost baseload.

Sam Darwish: No significant work has occurred on the towers, largely because of some of the things we just mentioned. So that remains a very, very tall order for us. But again, I mean, MTN is a partner of ours. We've been in partnership for more than two decades. Discussions are always ongoing. Okay, appreciate that. And just one follow-up.

And this is why also.

This is why also kind of like artificial intelligence and the proliferation of articulating that it is critical to whatever we're doing at the moment on the on ground.

For years, we've been operating this infrastructure, which has a lot of challenges in terms of logistics diesel delivery feed maintenance given the complex nature of what we operate now suddenly all of this data because of this elevated level.

Steve Howden: Um, you know, your guide this year kind of implies, you know, a 55% EBITDA margin, a nice uptick versus last year. So anything you could walk us through in terms of areas where you're seeing cost efficiencies between, you know, lower diesel costs, Project Green, and then kind of the longer-term path to get to 60% EBITDA margins, you know, how you see that, you know, transforming over the next few years? Hey Eric,

Level of compute we find ourselves available to us through the LMS and what the big guys have had to have created suddenly we have now this massive tool available to us with a lot of data that we've accumulated over the decade and we are now in the middle of kind of like.

Steve Howden: So a few things on the cost, I thought, yeah, you're right, the guide implies a 50% margin, so a couple of percentage points higher than where we finished in 2023. What's driving that? A lot of what's driving that is around some of the cost action that we've been taking, and that's in a variety of different areas. Everybody knows about Project Green, which has been driving down diesel consumption and therefore overall costs within Nigeria, in particular, bits and pieces in other markets as well, but mainly in Nigeria.

Redefining, how we operate using that a massive compute availability and part of what Youre seeing here is because of that and you're going to see more of that over the next few months.

Thanks Sam.

Thank you.

Thank you. Our next question comes from the line of Taylor <unk> of Barclays. Please go ahead.

Hi, good afternoon.

Okay.

I was wondering if I could ask about it.

The other contracts.

Should have coming up so.

Update on Ivory Coast.

Steve Howden: And then part of it is the reaction to where the macro is globally, where the macro is in our key markets like Nigeria. And we've been really looking at our cost structure and where we can be more efficient, where we can operate our business in more sensible and intelligent ways for less cost. So there's a lot of focus from us right now as a strategy for 2024 around cash generation. You see that embedded in our lower capex guide, a significantly lower capex guide for 2024 versus even the couple of prior years of capex spend.

Zambia to Rwanda.

And then the small amount of cash this year just want to check.

Any update on the status there.

In terms of a really good question.

The comments Matthew Thank you Richard.

Okay.

This takes us materially.

It kind of changes, which will be open to.

Okay, great. Thanks.

Okay.

We don't comment on ongoing discussions MTN and us in particular as I alluded earlier, we've been partners for two decades.

Sam Darwish: And it's also evident in the margins in terms of where we're looking to drive efficiency, which is cost-based as well. Unknown Speaker This is why also, kind of like artificial intelligence and the proliferation of artificial intelligence is critical to whatever we're doing at the moment on on the ground for years. We've been operating this infrastructure, which has a lot of challenges in terms of logistics, diesel delivery, field maintenance, given the complex nature of where we operate now, suddenly, all this data, because of this elevated level of compute. We find ourselves available to us, you know, through the LLMs and what the big guys have created. Suddenly, we now have this massive tool available to us with a lot of data that we've accumulated over the decades.

We are engaged on multiple fronts at any given point in time.

We do like to announce things that are kind of like that happen that are basically dusted unclear and that's why we've announced basically cote d'ivoire and and Cameroon.

Uh huh.

At the moment to be honest the only thing I would say is that everyone has seen from MTN. Most recent announcements from from our clients.

Numbered in Nigeria that they're under pressure I mean, this massive negative movement of the currency, which is roughly 250% negative and almost 14 months.

It is definitely taking its toll on them and these guys are mostly local currency revenue generating companies and at the moment, we feel our job and our duty is to stand by them and find ways to help elevate the pressure I mean this is not our first rodeo. We've seen this before we've stood up before and we supported them and at this stage.

Sam Darwish: And we are now in the middle of kind of redefining how we operate using that massive compute availability. And part of what you're seeing here is because of that. And you're going to see more of that over the next few months. All right. Thanks, Sam.

Stella Cridge: Thank you. Thank you. Our next question comes from Stella Cridge of Barclays. Please go ahead.

Of time, that's what we're going to continue to do I mean, that's what I can say.

Sam Darwish: Good afternoon, everyone. Many thanks for all the updates. I was wondering if I could ask about the status of the other contracts at MTN which you have coming up. I note the update on Ivory Coast. I see you've got ZambiaJu, RwandaJu, and then a small number of towers at the end of this year. I just wondered if there was any update on the status there. And in terms of a related question, you also referenced the comments from MTN NigeriaJu in the recent release saying they were looking at changes to existing tower releases. I mean, what kind of changes would you be open to from the IHS side?

And then just a quick follow up.

I appreciate the questions in relation to MTN.

Play the updates are positive in terms of getting cabin civ communicated what's behind this is Don.

More upcoming on some of the other smaller ones as well, but I will say just to kind of reiterate the XL announcement that we put out in January in Nigeria, which was covering 3900 tendency diversified areas.

Steve Howden: Look, we don't comment on ongoing discussions. MTN and us, in particular, as I've alluded earlier, we've been partners for two decades. We are engaged on multiple fronts at any given point in time. We do like to announce things that are kind of like, that have happened, that are basically dusted and cleared. And that's why we've announced basically Cote d'Ivoire and Cameroon. At the moment, to be honest, the only thing I would say is that everyone has seen from MTN's most recent announcement, from our clients' numbers in Nigeria, that they're under pressure. I mean, this massive negative movement of the currency, which is roughly 250 percent negative in almost 14 months, is definitely taking its toll on them. I mean, these guys are mostly local currency revenue generating companies. And at the moment, we feel our job and our duty is just to stand by them and find ways to help alleviate the pressure. I mean, this is not our first rodeo. We've seen this before.

Of which turn off thousands accreditation site as well.

Obviously that is correctly a lot of focus on MTN.

Case, with IHS as well and but we're also making sure we continue progressing and moving forward in a material way with other key customers as well.

That's great.

And I think if I can maybe also.

Thank you.

Could you just comment on.

In terms of the cash balance at the moment how much.

Cool.

Correct.

This 115 million release of cash collateral is this included cash balance at the end of 2023, and then finally ivory coast be financing.

Scott.

What does that show the benefit.

<unk> in terms of the settlement of intercompany Rod.

Okay great.

Sure.

On the bilateral that was started a few days you guys did note. The 115 million cash collateral is not included in the December 31 cash balance so that is additional cash additional liquidity.

Sam Darwish: We've stood up before, and we've supported them. And at this stage of time, that's what we're going to continue to do. I mean, that's all I can say. And then Stella, just a quick follow-up.

And as we said that that will reduce interest on that both specific obligations by about 3% sorry.

Steve Howden: I mean, obviously, appreciate your questions in relation to MTN, and hopefully the updates are positive in terms of getting CAM and CIV, Cameroon and Côte d'Ivoire behind us and done, and more upcoming on some of the other smaller ones as well. But also, just to kind of reiterate the AFL announcement that we put out in January in Nigeria, which covered 3,900 tenancies over a five-year period, of which So whilst obviously there's a lot of focus on MTN, and that's the case within IHS as well, but we're also making sure we continue progressing and moving forward in a material way with other key customers as well. That's great. Many thanks for those answers.

Saving interest, it's freeing up cash.

Leverage positive.

So that was the reason they are not on that type of wireline so that was sort of in that.

I know you had asked about foreign cycle with many other styles as well with yes, we have the U S. Dollar obligations that the top 10, we utilized our local AD markets in particular currency markets to try and grow types of that dollar obligations down back into the country that life currency level side.

That was just one example of that and $116 million million dollars equivalents.

We've just been shifted down into CRE based on what we've done is we've raised that money.

Stella Cridge: And I mean, if I could maybe also ask something on the liquidity stroke debt side, could you just comment on, in terms of the cash balance at the moment, how much is sitting at the whole call versus opcalls? This 115 million release of cash collateral, is this included in the cash balance at the end of 2023? And then finally, this Ivory Coast refinancing stroke new debt?

There was a tiny stopped.

Existing debt.

While it's been refinanced.

Prices in upstream in that.

That capital up to the Holdco will extinguished.

Obligations against that that was signed.

Just before the end of the year, but the upstream in the drawdown the upstream it was done.

Steve Howden: What was actually the benefit of the whole call in terms of the settlement of intercompany loans? Sure, so Stella, on the bilateral, that was only signed a few days ago, so no, the approximate $150 million cash collateral is not included in the December 31 cash balance, so that is additional cash, additional liquidity. And as we said, that will reduce interest on those specific obligations by about 3%. So it's saving interest, it's bringing in cash, and it's leverage positive, so that was the reason for doing that. On the Cote d'Ivoire loan, so that was something that I know you and I have spoken about before, and spoken with many others about as well, was we have US dollar obligations at the top; can we utilize our local markets, in particular local currency markets, to try and rotate some of those US dollar obligations down back into the countries at the local currency level?

Please yes, but it's at the prices being completed and that isn't lost in the year end cash numbers.

That's another upside to you guys in the business.

In that example.

Able to get extremely comparative if not slightly cheaper interest rates in the local market versus U S. Total obligations, so again, managing maturities and managing currency the balance sheet, but also making sure we take care of interest rate expense as well.

And the split of the Holdco Opco cash.

Great.

Sorry.

Besides that.

It hasn't been necessary and in the last quarter.

So that's.

<unk> hundred billion of cash on the grade.

And as a comfortable balance sitting assay offshore.

Okay.

Thank you that brings us to the end of the IHS holding limited <unk> and full year earnings results Conference call should you have any questions. Please contact the investor relations team via the E Mail address Investor relations at IHS towers Dot com.

Steve Howden: So that was just one example of that $116 million equivalent which has been shifted down into CIB. So what we've done is we've raised that money in Cote d'Ivoire; there was a tiny stub of existing debt in Cote d'Ivoire, which has been refinanced, and then we're in the process of upstreaming that capital up to the whole Cote, where we will extinguish some dollar obligations. Again, that was signed just before the end of the year, but the upstreaming, the drawdown of the upstreaming was done, hasn't been completed yet, but it's in the process of being completed, and that is not in the year-end cash numbers, so that's another upside to the business. And in that example, we were able to get extremely comparable, if not slightly cheaper, interest rates in the local market versus US dollar obligations.

<unk>. Thank you for your participation today and wish you a good day.

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Steve Howden: So again, managing maturities and managing currency, the balance sheet, but also making sure we take care of interest rate expense as well, and the split of the whole co-op called cash at year-end. Sorry, we ended the slow start, but it hasn't moved materially in the last quarter. So we've got just under £300 million of cash around the group, and there's a comfortable balance sitting offshore.

Operator: [inaudible] Thank you. That brings us to the end of the IHS Hldg Limited 4Q and 4-Year Earnings Results Conference Call. Should you have any questions, please contact the Investor Relations Team via the email address InvestorRelations at IHStowers.com. The Management Team, thank you for your participation today and wish you a good day.

Yeah.

[music].