Good day and welcome to the IHS Holding Limited Results Call for the Three-Month period ended September 30th, 2022. Please note that today's conference is being webcast and recorded. [Operator Instructions] At this time, I'd like to turn the conference over to Colby Synesael. Please go ahead, sir.

Thank you, operator. Thanks also to everyone for joining the call today. I'm Colby Synesael, the SVP of Communications here at IHS. With me today are Sam Darwish, the Chairman and CEO of IHS; and Steve Howden, CFO. This morning we published our financial statements for the three-month and nine-month period ended September 30th, 2022 on the Investor Relations section of our website and issued a related earnings release and presentation. These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under the ticker symbol IHS, which comprises the entirety of the Group's operations. Before we discussed the results, I'd like to draw your attention to the disclaimer set out at the beginning of the presentation on slide two, which should be read in full along with the cautionary statement regarding forward-looking statements set out in our earnings release and 6-K filed as well today. In particular, the information to be discussed may contain forward-looking statements, which by their nature, involve known and unknown risks, uncertainties, and other important factors, some of which are beyond our control, that are difficult to predict and other factors which may cause actual results, performance, or achievements or industry results to be materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking statements, including those discussed in the risk factors section or our Form 20-F/A filed with the Securities and Exchange Commission and our other filings with the SEC. We'll also refer to non-IFRS measures that we view as important in assessing the performance of our business. Reconciliation of non-IFRS metrics to the nearest IFRS metric 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.

Thanks Colby and welcome, everyone, to our third quarter 2022 earnings results call. We had a strong quarter, driven by continued secular demand plus incremental recurring revenue and a one-time $18 million catch-up payment. Based largely on the strong secular demand as well as additional upside from power revenue and lower withholding taxes and despite an $11 million ForEx headwind versus rates previously assumed in guidance, we are raising our 2022 guidance for revenue by $20 million, adjusted EBITDA by $10 million, and RLFCF by $10 million and reiterating our guidance for CapEx. Having just raised our CapEx guidance on October 24th when we announced Project Green. At that time, we raised CapEx guidance by $100 million, including $110 million for Project Green, which I will discuss later, as we also took the opportunity to narrow our former range based on actual spend year-to-date. Steve will take you through the results in greater detail. But before doing so, I'm going to discuss our growth strategy, including a focus on revenue, adjusted EBITDA, and RLFCF, provide an overview of our carbon reduction road map, of which Project Green is our next significant step, and lastly, provide a strategic update on other key topics. On slide four, we again show our revenue, adjusted EBITDA and RLFCF results over the past five years that generated organic revenue growth of 15.2%, adjusted EBITDA growth of 15.1%, and RLFCF growth of 14.1% compounded annually during this time. Given our short existence as a public company, I think it's important to again highlight our long and established track record of generating attractive risk-adjusted growth across multiple market cycles. We believe this attractive growth is a function of the key elements of our strategy, namely the strong demand trends in our markets, the inherent benefits of the…

Thanks, Sam, and hello to everyone. Turning to Slide 10. As Sam mentioned, we're very pleased with how the business performed in the third quarter 2022 against a challenging macro backdrop, while also noting the non-recurring items that we had anticipated in guidance for the fourth quarter, but landed in the third quarter. You will see on this slide that our main KPIs have all increased by double-digit percentages versus Q3 2021. Specifically, we delivered 30% growth in consolidated revenue, 25% growth in adjusted EBITDA and 24% growth in recurring levered free cash flow in each case driven by both organic and inorganic activity across our markets as well as the nonrecurring items. Our adjusted EBITDA margin was 52.7%. As in past quarters, with onetime items that impact comparability will highlight these differences over the next few slides so you can understand the true performance of the business this quarter. As you'll also see, our level of investment in CapEx to grow the business increased by over 100% in the third quarter. This was largely due to investment in Project Green along with increased CapEx relating to I-Systems and to the GTS' SP5 and South Africa acquisitions that completed earlier in the year. Finally, versus the same time last year, our consolidated net leverage ratio increased to 3.1 times, which is the same level as Q2 2022. Turning to our revenue on a consolidated basis. Slide 11 shows the components of our 30.2% reported consolidated revenue growth. Organic revenue growth of 23.1% in the third quarter was driven primarily by CPI escalations, power indexation, which we've now shown as its own bar, Lease Amendments, FX reset, New Colocation, Fiber, which we've also shown as its own bar and New Sites. The level of escalations you see reflects our contract protections…

Thank you. [Operator Instructions] Our first question is with Jonathan Atkin from RBC Capital. Jonathan, your line is open.

Yeah. So I wondered if you could maybe talk a little bit about the refurbishment CapEx for South Africa that you referenced, the length and extent of that elevated CapEx and what's going on there? And then I've got a couple of follow-ups. Thanks.

Hey, Jon, it's Steve. So in terms of refurbishment CapEx here, we've got some refurbishment going through this year and next year. If you remember, originally, our guide was around $40 million to $45 million of CapEx when we brought South Africa into the guide when we closed or just before we close the transaction. So that's all on track. We're still in line with that. And we'll get to next year when we get to the full year earnings call next year.

And then Nigeria, the reduction of the 1,444 Lease Amendments, can you – I guess, I was a little surprised to see that. I didn't realize the power was variable, and I would have thought that would be non-cancelable. So any color on that?

Yeah. No financial impact on that, just to be clear. So that was just a reallocation between what we define as a lease amendment, which has to be recurring long term use fees and those ones were not they were power. So we've taken that out of the tenant count?

And then lastly, any commentary on the Naira, there seems to be a divergence again between the various rates. And how is that impacting your financial or operational decisions?

Look, more of the same, to be honest, in terms of the overall environment in Nigeria. As we mentioned in the comments just now, dollars are hard to source in Nigeria, they remain available. We're continuing to look to source, but it continues to be a challenge as it has been through the course of 2022. One of the things we're obviously doing right now is utilizing capital on Project Green, a chunk of which is local currency. So, we are deploying the cash flow generation from Nigeria into that project at the moment.

Thanks very much.

Our next question is with Greg Williams from Cowen. Greg, your line is open.

Great. Thanks for taking my questions. Two, if I may. You did lower your Build-to-Suit guidance, I think, by $300 million to $1,350, and you mentioned timing and general market conditions. I was just wondering, if you get more specific, is that the higher hurdle rate – I'm sorry, the higher cost of debt and cost of capital, or is it labor and supply, or are you looking more towards M&A? And my second question is just that on the M&A landscape, the names come up on the Orido [ph]acquisition. And you mentioned robust landscape, but you did mention the higher hurdle rates. And I'm just wondering, if that's limiting your M&A opportunities? Thanks.

Hey, Greg. On the BTS side of things, that's really market driven. And I would just point out the majority of that reduction is actually coming through rural sites in Nigeria, which have very little financial impact to us, that's just less of a priority for ourselves and for customers at the moment. So, nothing too significant in that and as we look forward to next year, I think we'll see an overall cooling of BTS requirements versus what we originally started out with this year. But certainly, that will still be a component of our growth next year. We still want to deploy capital into BTS. The return's still makes sense, certainly. So, we'll look to keep doing that in selected markets.

Hi Greg, this is Sam. Regarding the M&A, look, as specific as to -- Oridu [ph], we cannot comment on processes or client transactions, but we have seen valuations kind of like softened recently. And again, we continue to pursue opportunities, but we are very highly selective at the moment. We'll see how the future evolves.

Got it. Thank you.

Thank you.

Our next question is from Brett Feldman with Goldman Sachs. Brett, your line is open.

Thanks. Just a couple of follow-ups. You just made the point about how you might see a little bit of cooling of the BTS opportunity rolling into next year, but you've also talked about the strong secular demand you're seeing for your Towers. So, I'm just wondering if you can kind of give us a little more context around why there might be less build-to-suit opportunities if the demand backdrop remains strong. And then on one of the slides, you talked about you will continue to evaluate options and enhance the value of the company that wasn't a tile dedicated to your discussion of stock liquidity. And so I'm wondering was that looking at options that are unique to things that enhance stock liquidity or is there a broader point you are trying to make? Thank you.

Yes, Brett. So, on the BTS, I mean, I was referencing earlier in the year, we had a target of around 2,300 BTS for this year, and that's obviously cooled through the course of the year. So, I think where we are now in terms of the 1,350, that's the sort of level that we may get to next year. But let's see. We're still working with our customers on next year's pipeline. And I would just say in terms of the overall sector demand, don't forget BTS is one component colocations, lease amendments. We're still seeing a lot of 4G rollout activity. We're starting to see 5G. We've got 5G starting to come in Nigeria now. We even have 5G in South Africa as well and we're starting to see possibilities of 5G in places like Kuwait as well and don't forget we have Brazil that's still working through it. It's a breakup, which will then really allow the carriers to then start putting their best foot forward on a 5G perspective as well. So, plenty of different levers for growth into 2023. Stock liquidity. Brett, just to repeat your question. So, are we alluding to anything in specific, was that the question?

Yes, because you talked about the options and enhance the value of the company, but it seemed to be in that tile dedicated to stock liquidity. So, I didn't know if that was options related to stock liquidity or for something else you were trying to say?

Yes. Not, not particularly. I mean we're just re-highlighting that it's clearly a focus of the company to try to improve the liquidity in the stock, i.e. the free float. We have seen some incremental benefit on that. But obviously, we still have a way to go. So, that remains a big focus for us. As everybody knows, we did unblock the first amount of pre-IPO shareholder shares in May. The next block is now available. We have not unlocked it. So, we're just making that point clear. But still a key focus of the company and the Board's work is to continue assessing options to help with that liquidity position.

That's helpful. Can I just ask a quick follow-up? The general commentary around the strong secular demand environment, your customers, the vast majority of their customers use prepaid services and so therefore, your customers' revenues are directly responsive to how much usage is on their networks. And of course, we've been in a really volatile economic climate. And just what's the discussion been like with your carrier customers? Are they finding that there is any reduction in the usage of their networks by their customers because of any economic stresses, or is this just a secular tailwind where usage is growing through cycles as we've sort of historically seen?

I mean, the opposite so far, Brett, we've just seen some of our bigger customers report MTN Nigeria is 22% up on revenue, more so on, EBITDA, rest on Nigeria's 16% up on revenue. MTN in SA is also up a number of percentage points, despite being a more mature market. So we're actually seeing the big customers still continue to deliver in their businesses, which obviously then flows through into the overall demand for infrastructure services into our business as well.

All right. Thank you.

Our next question is from Michael Rollins with Citi. Michael, your line is open.

Thanks everybody and good morning. A couple of questions, the first one, just following on some of the comments in terms of leasing activity that you were discussing, as you look at the revenue contributions from New Colocation and Lease Amendments in dollars year-to-date, how is that progressing versus the internal expectations that you set going into the year? And just how should we think about the opportunity for that over time, because you mentioned a few different crosscurrents in some of the commentary, so just kind of curious how to think about that also going forward? And then, sorry, finally, one other thing. The 1.1% revenue contribution to fiber, it looks like that's a contribution to the year ago revenue. If you had to unpack what fiber is growing at organically in your business, what would that number look like in the third quarter? Thanks.

Hi. Mike. So in terms of the shape of the building blocks, I mean, I think year-to-date, we're seeing what we expected to in terms of the split between Colocation Build-to-suit and Lease Amendments, possibly slightly less from Build-to-suits. As we said, we've downsized the amount that we're going to Build this year, although as we keep saying a big majority of that was rural sites, which don't really contribute that much. So similar pattern to what we're expecting, Lease Amendments leading the way. We always thought that, that would be the biggest component of those three building blocks. And clearly, we're getting more come through from CPI and diesel pass-through given the nature of the macro through the course of this year. But again, that's just showing that our contract structures are working effectively as we always try to articulate. So I would say those are probably the two larger ones, but that's really driven by macro. And then on your question on fiber, so just to be clear, the fiber split out there is the organic growth in fiber, keeping in mind that the vast, vast majority of our iSystems Brazilian fiber business is still sitting in the inorganic block on that slide 11. We consummated that acquisition in November last year. So you'll start to see that unwind from inorganic into organic starting Q4 and then into Q1. So that $5 million or 1.1% fiber growth is organic from Nigeria. And still -- it's still a small part of our business, but growing nicely. We haven't split out yet the precise reported and organic split of the fiber businesses just by themselves, but we wanted to at least start breaking out in terms of the overall growth building blocks that you see on the page.

Thank you.

Our next question is from Eric Luebchow from Wells Fargo. Eric, your line is open.

Great. Thanks for taking the questions. Curious, if you could just touch on the leasing outlook in Nigeria. You mentioned kind of some of the difficult macro environment indicators there, but it looks like another spectrum auction is coming later this year? And maybe you could talk about any change whatsoever you've seen in the pace of activity from MTN or the other carriers? And then second, just touching back on capital allocation. Again, I know stock liquidity is a key focus, but how do you think about potentially a share repurchase, which I realize wouldn't help liquidity in the near term, but could help improve the stock price and potentially improve liquidity longer term? Thank you.

So, I think, in terms of the Nigeria leasing environment, so similar to what we're seeing now and what we've seen through 2022, to be honest, you rightly say, there's more spectrum coming. At the moment, we have MTN as the key carrier that has 5G spectrum, whereas Airtel does not. So I'm taking the view that Airtel will be going after 5G spectrum in the next allocation, but let's see how that unfolds. And if that would be the case, then that gives another emphasis on extra rollout such that we could potentially then have two customers rolling out on us with 5G equipment. So that's also come in the future. Again, I'll repeat something that we've said for a couple of quarters now. 5G is certainly coming in Nigeria, and we're starting to get 5G lease amendments, particularly on our site today, but it's a very small component, very small. And we would see 2023 is really a transitional year, where people are starting to roll out 5G a little bit more on a commercial basis. But really, I think, you'll start to see the main impact as we get into 2024. But certainly, all positive, good news that more spectrum is coming and that the two real big key carriers, MTN and Airtel, should hopefully be well positioned by the end of the year. So I think that's really the continuing story around Nigeria, not seeing huge difference really in terms of desire for new build sites or collocations and lease Amendments will continue to be a big driver of growth as we go into next year that we continue to see. On the share repurchase question, I mean, that's certainly one thing that we continue to consider as a company and board along with lots of other options as well. I think you hit the nail on the head in terms of whether or not a share repurchase would help with the overall liquidity, which obviously it would not -- there's obviously other factors to consider around that decision as well. But we're still at a position where we feel like we are a young company. We're continuing to execute on the business, trying to pace the numbers quarter-on-quarter such that everybody understands the underlying fundamentals and strength of the business and resilience of the business in this macro environment. And things like share repurchases, amongst other things, we will certainly continue to assess and consider but not one for right now.

Great. Thank you.

At this time, there are no further questions. [Operator Instructions]. Our next question is from David Shellhammer with PGIM. David, your line is open.

Thank you for taking my questions. On the MTM call, they mentioned that they were in the process of renegotiating lease agreements with you guys, both focused on energy cost adjustments and currency mix. I was just wondering if these negotiations prove successful for them, what impact would this have on your top line and timing of the possible lease renegotiations A – Sam Darwish: Yes. I think the MTN comment was around Telcos generally, as opposed to us specifically. So I wouldn't necessarily assume that anything is going to change from that point of view around power and things like that. But look, we're always engaged with our customers if there are pain points they want to fix. There's always things that we would like to fix as well. So given the growth environment of our countries, these end up being a win-win. But I wouldn't put too much relevance on that at this point in time.

Thank you.

That concludes our Q&A, and that brings us to the end of the IHS Holdings Limited Third Quarter 2022 Earnings Results Call. Should you have any questions, please contact the Investor Relations team via the e-mail address, investorrelations@ihstowers.com.. The management team, thank you for your participation today and wish you a good day.