Good day. And welcome to the IHS Holding Limited 4Q and Full-Year Earnings Results Conference call. Please note that today's conference is being webcast and recorded. [Operator Instructions]. At this time, I would 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 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 SEC, which can also be found on the Investor Relations section of our website, and issued a related earnings release and presentation. These are the consolidated results of IHS Holding Limited, which is listed on the New York Stock Exchange under the ticker symbol IHS, and which comprises the entirety of the group's operations. Before we discuss the results, I would like to draw your attention to the disclaimer set out at the beginning of the presentation on slide 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 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 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, 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. We will also refer to non-IFRS measures, including adjusted EBITDA, that we view as important in assessing the performance of our business, and ALFCF that we view as important in assessing the liquidity of our business. A reconciliation of non-IFRS metrics to the nearest IFRS metrics can be found on 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 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 ALFCF 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 trends we are seeing across our business, including growth in lease amendments, new tenants, new sites, or build-to-suit and targeted fiber roll-out. 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%. Groupwide, we added 1,041 colocations 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 3,950 new tenancies over the next five years, much of it front-loaded to 2024 and 2025. Which takes me to an important point. These strong fundamental trends are occurring against a challenging backdrop. The naira continues to devalue at levels that sadly are offsetting much of these strong secular trends. From January to December 2023, the naira suffered a 98% unfavorable movement. And from January 2024 to date, we have seen a further 75% unfavorable movement. This means a total unfavorable movement of 246% since January 2023. Most of this negative movement came as a result of positively viewed government actions of unifying multiple exchange rates, removing the expensive petrol subsidies, and trying to…

Thanks, Sam. And hello, everyone. Turning to slide 9. As Sam mentioned, we're pleased to share our FY 2023 and fourth quarter 2023 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 FY 2023, 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, Towers and 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 declined and adjusted EBITDA increased modestly, both metrics impacted by the devaluation in the naira in 2023. Specifically in Q4, revenue declined by 3.1%, but adjusted EBITDA increased by 0.6%, while ALFCF increased 22%. For the full year, our revenue grew by 8%, adjusted EBITDA by 10% and ALFCF by 19% all on a reported basis. Our 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. And finally, our consolidated net leverage ratio increased to 3.4 times following the naira 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% for the year was driven primarily by FX resets, CPI escalations and new lease amendments. Power-related revenue, fiber, new colocation 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…

[Operator Instructions]. Our first question comes from the line of Michael Elias from TD Cowen.

A few if I may. To start off, relating to the evaluation of the strategic alternatives. I'm curious. Can 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 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 naira. I have a follow-up question after that, but any color on these alternatives would be great.

We believe the business is undervalued. It's not a direct reflection of where the naira is. The business, as you've seen, is reporting solid numbers and it's been reporting solid numbers quarter after quarter. Of course, the naira devaluation situation will have an impact but, again, it is within manageable remits. 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, 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 details. We're doing that work at the moment together with our advisors, J.P. Morgan included, and we will communicate as and when appropriate.

Just as a follow-up question, with the volatility that we've seen in the naira, how would you describe the ability and means to upstream cash in 2024?

You're right. Volatility is a good word to describe it. 2023 was challenging, no doubt, in terms of sourcing of dollars and therefore upstreaming, although we did we did get $65 million out earlier in the year in 2023. I think from a 2024 perspective that we have seen more liquidity in the markets – January, February and March to date. So that is certainly the positive. I would say that's off the back of the number of moves by the Nigerian government, central bank, monetary policy, et cetera, around the currency devaluation, but also interest rate increases. So that's the positive. But, obviously, we have to caution that we want to see it continue for a period of time. We've seen this couple of, let's call them, false dawns in the last nine or ten months in terms of reforms. 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 upstreaming.

Our next question comes from the line of Richard Choe from J.P. Morgan.

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?

I think one thing to note, 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 $100 million. So, 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 developing and therefore getting a little bit smaller. So we have about a set target on it right now. The focus with LatAm is to grow it organically for the short term, but obviously that's a key element of our value makeup and it's a business we want to continue growing organically where we can.

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 healthy pace.

Yeah. Both are going to help the pace. 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 20-F. The fiber business grew at 30% last year from a renewable perspective and the towers just a little bit less than that, but still growing strong.

[Operator Instructions]. Our next question comes on the line of Eric Luebchow from Wells Fargo.

I wanted to touch on the MTN agreement to move 2,500 sites. I know it's 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.

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 that most of which do not exist in a country like Nigeria where power, infrastructure, permits, regulation is all an uphill battle. That conversation we've had in October, today we are in February or March actually with another maybe 8, 9, 10 months left before the expiry and no significant work has occurred on the towers, largely because of some of the things you just mentioned. So that remains a very, very tall order for us. But, again, MTN is a partner of ours. We've been in partnership for more than two decades. Discussions are always ongoing.

Just one follow-up. Your guide this year kind of implies 55% EBITDA margin, a nice uptick versus last year. So, anything you could walk us through in terms of areas you're seeing cost efficiencies between lower diesel costs, Project Green 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?

A few things on the cost side. So, yeah, you're right there, the guide implies mid-50s EBITDA margin. So, a couple of percentage point higher than where we finished 2023. What's driving that? A lot that's driving that is around some of the cost actions 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 that may hit Nigeria. And then part of it is the reactions to where the macro is globally, where the macro is now in our key markets like Nigeria and we've been re-looking at our cost structure and where we can be more efficient, where we can operate the 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, significantly lower CapEx guide for 2024 versus even the couple of prior years of CapEx spend. And it's also evident in the margins in terms of where we're looking to drive efficiency down at the cost base as well.

Eric, 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 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 this data, because of this elevated level of compute we find available to us through the LLMs and what the big guys have created, suddenly we have now this massive tool available to us with a lot of data that we've accumulated over the decades and we are now in the middle 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.

Our next question comes from the line of Stella Cridge of Barclays.

I was wondering if I could ask about the status of the other contracts at MTN which you have coming up. So I note the update on Ivory Coast. I see you've got Zambia 2, Rwanda 2 and then the small amount 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 Nigeria during the recent release saying, they were looking at changes to existing tower releases. What kind of changes would you be open to from the IHS side? That would be great.

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 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. This massive negative movement of the currency, which is roughly 250% negative in almost 14 months, is definitely taking its toll on them. 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 elevate the pressure. This is not our first rodeo. We've seen this before. 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. That's what I can say.

Stella, just a quick follow-up. Obviously, appreciate questions in relation to MTN and hopefully the updates are positive in terms of getting Cameroon and Cote d'Ivoire behind us and done. More upcoming on some of the other smaller ones as well. But also just to kind of reiterate the Airtel announcement that we put out in January in Nigeria, which was covering 3,900 tenancies over a five-year period, of which 2,500 are colocation. So whilst obviously there's correctly 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.

If I can maybe also [indiscernible] on the liquidity/debt side, could you just comment in terms of the cash balance at the moment, how much is at the holdco versus the opcos? This $115 million release of cash collateral, is this included in the cash balance at the end of 2023? Finally, this Ivory Coast refinancing/new debt, what was actually the benefit at the holdco in terms of the settlement of inter-company loans, for instance?

Stella, on the bilateral, that was only signed a few days ago, so no. The approximately $115 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 up 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 with. We have the US dollar obligations at the top. Can we utilize our local markets, configure local currency markets to try and rotate some of that dollar obligation down back into the country at the local currency level. So that was just one example of that $116 million equivalent, which has been shifted down into COD [ph]. 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 holdco 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 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. In that example, we were able to get extremely comparative, if not slightly cheaper interest rates in the local market versus US dollar obligations. So, again, managing maturities and managing currency as a balance sheet, but also making sure we take care of interest rate expense as well.

And the split of the holdco cash at year-end, just as a rough breakdown?

We haven't disclosed that. But it hasn't moved materially in the last quarter. So just under $300 million of cash around the group and there's a comfortable balance sitting offshore.

Thank you. That brings us to the end of the IHS Holding Limited 4Q and full year earnings results conference call. Should you have any questions, please contact the Investor Relations team via the email address, investorrelations@ihstowers.com. The management team, thank you for your participation today. And wish you a good day.