IHS Holding Limited Price & Performance (IHS)

Berg, head of investor relations 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 12/31/2024. With the SEC. Which can also be found on the Investor Relations section of our website and issued a related earnings release presentation and supplemental deck. 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 disclaimer 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 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. Uncertainties and other important factors some of which are beyond our control. But 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 other filings with the SEC. We'll also refer to non IFRS measures including adjusted EBITDA, that we view as important in assessing the performance of our business and ALFCF we view as important in assessing the liquidity of our business. Our reconciliation of non IFRS metrics to the nearest IFRS metrics can be found in our earnings presentation which is available on the Investor Relations section of our website. And with that, I'd like to turn the call over to Sam Darwish, our Chairman and CEO.

Thanks, Robert.

And welcome everyone to our fourth quarter and full year 2024 earnings results call. We're reporting a strong performance in 2024, ending the year on a high with a strong Q4. Our key metrics revenue, adjusted EBITDA and ALFCF all coming in ahead of our guidance while CapEx was below expectations. And we saw a drop in our consolidated net leverage ratio. Our positive momentum reflects the continued strong secular trends we are seeing across our business, a more stable macroeconomic environment, strong operational focus, as well as the significant commercial and financial progress we have made during '24, as part of our ongoing strategic review. I'll go into more details on these important drivers on the next slide.

Looking at our revenue, we saw 48% organic growth driven by 6.5% constant currency growth. As well as a significant benefit from our Forex resets and power indexation which play a vital role in helping to offset the currency devaluation we faced during the year. As you can see from the slide, this was above our guidance range was aided by 9.2% constant currency growth in the fourth quarter twenty twenty four compared to the fourth quarter of twenty twenty three. Driven by growth in revenue from colocation, lease amendments and new sites. We continue to benefit from strong structural trends with growth underpinned by continued five gs deployment across our markets and importantly macroeconomic stabilization within our largest market, Nigeria. Turning to profitability. Our adjusted EBITDA reached $928,000,000 in 2024, with a margin of 54.3%. Up 100 basis points compared to 2023. Again, this came in ahead of our guidance on the back of strong momentum in Q4, where we achieved a 56.3% margin. This performance against the backdrop of the macroeconomic headwinds we have been navigating highlights the resilience of our financial model the strength of our current structures, and our continued financial discipline. We are pleased with our ALFCF generation during the year, which at $3.00 $4,000,000 was also ahead of guidance was driven by operational performance and ongoing CapEx optimization.

As I will discuss shortly, we continue to focus on our balance sheet with our net leverage at 3.7 times at the end of twenty twenty four falling from 3.9 times at the end of Q3 twenty twenty four. We carried out a number of significant refinancings through the year which pushed out our maturities and shifted more of our debt into local currency. As part of our strategic review, we received disposal proceeds from the sale of our Kuwait operations in December 2024 which we sold at 414.2% adjusted EBITDA after leases we will look to continue to earmark excess cash for further debt repayment. We are comforted that since the Q1 $20.24 naira devaluation in Nigeria, we have seen the naira strengthening on good U. S. Dollar availability. Enabling us to source and upstream $271,000,000 from Nigeria alone, in 2024. Addition to the solid financial performance we have made significant progress through 2024 across a number of our strategic initiatives. Let's turn to slide six to look at some of the highlights. In May 2024, we outlined some initial objectives of our strategic review all aimed at creating shareholder value. These included one, increasing our profitability and substantially reducing our to increase cash flow generation.

Two, continuing to review our portfolio of markets with a target of raising $500,000,000 to $1,000,000,000 and three, capital allocation of excess cash flow following the implementation of these strategic initiatives expected to be primarily utilized to reduce debt, and we will also consider share buybacks and or introducing a dividend policy. During the year, we have delivered on numerous elements of our strategic review pushing to unlock shareholder value versus what we believe is our existing suppressed valuation. We believe we have made strong commercial progress an important area for us in terms of improving the financial profile of the business while also enabling us to continue to derisk our future cash flows. We have extended commercial contracts with key customers into the next decade including all our 25,000 tenancies. Out to 200 out to 2,032 or beyond in addition to the extension of our Airtel Nigeria MLA to 2,031. This draws a line under a series of successful customer renewals. The result of this significant commercial progress is that we have recently renewed or extended 72% of our group revenue which we believe markedly improved our financial profile and visibility. Our average tenant term now sits at seven point eight years, and we have increased our contracted revenue to $11,900,000,000 We are also reassured by the improving backdrop within our largest market Nigeria.

In January, Nigeria's telecom regulated the NCC approved a 50% increase in tariffs for mobile network carriers. The first tariff adjustment in twelve years. These increases will support the ability of our carrier customers to continue investing in infrastructure and innovation ultimately benefiting consumers through improved services and connectivity. Including better network quality and greater coverage. Through a number of initiatives, we have derisked our operating model by materially reducing our exposure to power prices. With the expectation that this will result in reduced volatility of our earnings. Through our contract renewals, we have moved the significant majority of our business to either power pass through, like in South Africa, or power indexation like in Nigeria, closer allowing our operating model to the steel and glass model in more developed countries. As I have already highlighted, our 2024 financial performance highlights the progress we have made towards our goal of increasing adjusted EBITDA and substantially reducing our CapEx to increase cash flow generation with over $300,000,000 of ALCF generated in 2024 despite significant ForEx headwinds. In addition to our continued cost discipline and narrowed focus on capital allocation, we will benefit from a reduction in withholding tax rates in Nigeria.

Effective from 01/01/2025, amounts withheld by customers in Nigeria, which are paid to the IFRS reduced from 10% to 2% and we expect this to be significantly supportive to our cash flow generation in '25 and going forward. Also continue to assess group wide costs CapEx structures and new ways to operate our networks including how we can introduce more technology especially artificial intelligence, into our ways of working help us realize future efficiencies. Steve will discuss our financial performance and 2025 guidance in more depth later in this call, but to summarize, we are pleased with the progress we have made and our 2025 guidance implies a continuation of these trends with continued organic revenue growth and a further step up in adjusted EBITDA margin and ALCF generation notwithstanding the disposal of our Kuwaiti business. Moving to our balance sheet, we continue to take a disciplined approach to capital deployment recognizing the importance of maintaining a strong balance sheet. We made important move during the year in line with our strategic priorities to extend our debt maturity profile and shift more of our debt into local currency. This was evidenced in Q4 when we refinanced $1,600,000,000 of our debt through the issuance of new senior notes and a new term loan.

Remain comfortable with our cash and liquidity position with over $900,000,000 of available liquidity at the end of twenty twenty four. During the year, we made significant enhancements to our governance The proposals to amend the company's articles of association were approved by shareholders at the AGM held in June. The voting results marked a significant achievement for IHS better aligning our governance framework with that of mature U. S. Listed companies. As part of our strategic review, committed to examining our portfolio of markets to determine the right composition for IHS going forward. In December, we completed the disposal our 70% stake in IHS Kuwait to ZYN Kuwait with an enterprise value of $230,000,000 that we believe highlights the significant value contained within the component parts of our wider portfolio. This comes on top of the sale of our Peru business earlier in the year. Our current footprint stands eight markets across two continents can be seen on Slide seven. Our disposal work remains in progress as we continue with the target of raising 500,000,000 to $1,000,000,000 As previously indicated, excess cash following implementation of our strategic initiatives is expected to be primarily used to reduce debt, while also considering share buybacks and or introducing a dividend policy.

So to summarize on slide eight, after a strong fourth quarter performance, we ended 2024 with financial results ahead of guidance, leverage reducing, asset disposals underway, shareholder rights improved, and with a derisked commercial and operating business model. We have made significant progress towards our strategic goals but there is more work to do. Looking to 2025 and beyond, we remain focused on further enhancing our profitability and cash flow generation, as can be seen in our 2025 guidance We are committed to further strengthening our balance sheet supported by further select asset disposals, aiming to deliver increasing returns for all our shareholders. We remain excited by the strong structural growth opportunities across our footprint and believe we are well placed to leverage our market leading positions to support growing demand for our critical communications infrastructure with growth underpinned by continued five gs deployment across our larger markets. Improving backdrop with our largest market Nigeria after recent carrier tariff rate increases and an improving macroeconomic position continues to help. And with that, I'll turn the call over to Steve.

Thanks, Sam, and hello, everyone. Turning to Slide 10, here we show our full year 'twenty four and fourth quarter 'twenty four performance.

Our results came in better than expected, against a challenging but improving macroeconomic environment in Nigeria where we saw higher levels of stability in the latter part of the year.

As we look at the results, please note the year over year comparisons are in some cases impacted by the Kuwait disposal, that closed in December 2024, and we've called these out where relevant. In terms of the results, both towers and tenants are down approximately 21%, respectively, year over year, while lease amendments increased by high single digit percentages.

Both tower and tenant figures would have grown year on year in the absence of the Kuwait disposal.

On a reported basis in the fourth quarter, revenue declined by approximately 14% year on year impacted by the very different FX environment versus the fourth quarter of twenty twenty three, and the new financial terms with MTN Nigeria. But increased 4.2% compared to the third quarter of twenty twenty four. As a reminder, naira average FX rate to the dollar was Naira $8.15 in the fourth quarter of twenty twenty three, and with $16.29 naira in the fourth quarter of twenty twenty four. Adjusted EBITDA was down 10% year on year, but adjusted EBITDA margin was up two fifty basis points. Reflecting our continued cost control and the resilience of our financial model.

Fourth quarter twenty twenty four adjusted EBITDA was in line with third quarter adjusted EBITDA.

Meanwhile, ALFCF declined by almost 9% impacted by similar factors affecting revenue and adjusted EBITDA in addition to the higher interest costs following our bond refinancing in November 2024 ALFCF increased again though by 23% versus third quarter twenty twenty four ALFCF. Our level of investment decreased by 37% in the quarter and 56% for the year, largely driven by the pullback in CapEx across all segments as we continue to focus on improving cash generation. Finally, our consolidated net leverage ratio increased year on year to 3.7 times at the end of the year. Having peaked at 3.9 times in second quarter, and third quarter of twenty twenty four It is now delevered 0.2 times from third quarter to the end of the year. Which obviously includes the impact of the Kuwait disposal. Slide 11 shows the components of our fourth quarter twenty twenty four revenue on a consolidated basis. Where you can see how the naira devaluation in particular turned a quarter of strong organic and constant currency growth, into a 14% decline. The naira devalued 50% in Q4 twenty twenty four versus Q4 twenty twenty three Yet the business delivered organic revenue growth of 39% driven primarily by FX resets [indiscernible] CPI escalators, and lease amendments.

And from a constant currency perspective, revenue grew over 9% driven primarily by CPI escalations new lease amendments and new collocations. So positive signs of the fundamental underlying tenancy growth continuing across our key markets. The right side of the page shows the organic growth rates of each of our segments for the quarter. Where our Nigeria segment grew approximately 62% obviously, including a large benefit from the FX reset. Slide 12 shows the full year version of our growth bridge highlighting the FX impact again. But also the contractual protections of CPI escalators and FX resets that help to partly mitigate the FX volatility.

On slide 13, you can see our consolidated revenue adjusted EBITDA and adjusted EBITDA margins for the fourth quarter and full year 2024 as we've already discussed and highlighting that our results beat our guidance across these metrics. Specifically in the fourth quarter of twenty twenty four, adjusted EBITDA of $246,000,000 and adjusted EBITDA margin of 56.3% continues the trend of higher margins post our first quarter dip from that naira devaluation. On to slide 14, an adjusted levered free cash flow. In the fourth quarter of twenty twenty four, we generated ALFCF of $107,000,000 That's a 9.3% decrease versus the fourth quarter of twenty twenty three. This was primarily due to the decrease in adjusted EBITDA and an increase in interest costs following our November bond refinancing partially offset by a decrease in revenue withholding Our ALFCF cash conversion rate was 43.5%, Again, though, I'd like to note the positive progression of ALFCF and its conversion rate through the quarters of 2024. For the full year, we generated ALFCF of $3.00 $4,000,000 and our ALFCF cash conversion rate was 32.8%. On to CapEx and fourth quarter twenty four CapEx of $83,000,000 decreased 37% year on year and full year CapEx of $256,000,000 decreased by 56%.

Continuing the trends that we've seen over recent quarters.

The decrease in the full year CapEx was driven by lower expenditure across all of our segments. The decrease in Nigeria, primarily driven by reductions related to Project Green given the investment in that project is largely complete. In Sub Saharan Africa, primarily driven by a decrease in refurbishment CapEx, and the reduction in LATAM CapEx driven by decreases related to fiber and new site CapEx although we still retain a healthy level.

Of new site build in Brazil. On the segment review, on to slide 15, I'll start as usual with Nigeria. In November, the Central Bank of Nigeria introduced [indiscernible] That's a strategic road map for the Nigeria payment system. As the CBN aims to continue enhancing its financial transparency. In November, the Monetary Policy Committee increased interest rates by 25 basis points bringing the NPR to 27.5% That's a total of six rate hikes during 2024. These actions appear to have had a positive impact again on Nigeria's FX market, with the currency appreciating in December and more recently into Q1 twenty twenty five. We've seen an increase in U. S. Dollars in Nigeria, and FX reserves in the country have a gain increase to $40,900,000,000 at the December 2024. Up from $38,400,000,000 at the September 2024. And since the FX environment adjusted in Q1, we've been able to continue up [indiscernible] We've up streamed $271,000,000 to the group during the year from Nigeria alone. Most recently, the National Bureau of Statistics rebased Nigeria's consumer price index bringing January 2025 headline inflation rate to 24.5% versus the 34.8% in December. Of twenty twenty four. And then most recently in February, of this year, 2025, the MPC held the policy rate steady at 27 and a half percent for the first time in six meetings.

And reaffirmed they remain focused on creating price stability in the country. So continued macroeconomic progress, but obviously more work still to be done. For us, specifically in Nigeria for IHS, our fourth quarter twenty twenty four revenue of $259,000,000 decreased 19% year on year on a reported basis.

Reflecting what we've previously discussed, the significant FX headwinds year over year.

And the impact of the new financial terms with MTN Nigeria. This more than offset the 61.5% organic growth which was driven primarily by FX resets and power indexation. Our colocation rate was down to 1.56 times That's down from 1.59 times in the fourth quarter of twenty twenty three. Given we reintegrated two ten towers and we have five twenty nine tenant churn. In the third quarter of twenty twenty four from our smallest key customer in Nigeria which we were not recognizing revenue on at the time. So lease amendments continue to be an important driver of growth. Increasing 3% year on year as our customers added additional equipment to our site.

The fourth quarter twenty twenty four segment adjusted EBITDA in Nigeria was $155,000,000 That's a 22.5% decrease from a year ago. While segment adjusted EBITDA margin was down two fifty basis points to 59.8% given the reduction in revenue described and a write down of inventory in the period as well, partially offset by a reduction in tower repairs, maintenance costs and diesel costs. Moving to our Sub Saharan African segment, revenue was broadly flat and segment adjusted EBITDA increased 29.6% year on year.

This performance was primarily due to lower revenues and lower costs being recognized in South Africa following the unwind of the power managed services agreement with MTN South Africa. Which has no impact on segment adjusted EBITDA. The performance has further benefited from new collocations, lower regulatory fees and reduced tower repairs and maintenance costs, And segment adjusted EBITDA margin increased substantially by fourteen eighty basis points as a result. To 65.1%. In our Latam segment, Towers and Tenants grew by 7.9%. And 7.2%, respectively, Revenue decreased by 18% because of negative FX movements and the reduction in revenue recognition from Oi given their judicial recovery proceeding early in 2024. In Brazil, our second largest market with 8,306 towers, macro conditions softened this quarter as the Brazilian real continued to devalue against the dollar. And there were increases in both interest rates and inflation. In terms of Latam profitability, while segment adjusted EBITDA decreased by 10%, segment adjusted EBITDA margin increased seven fifty basis points, versus the fourth quarter of twenty twenty three, which mostly reflects the decrease in revenue while savings across several cost lines was accretive for margins. And then MENA, as Sam discussed, we completed the disposal of our 70% interest in IHS Kuwait on 12/19/2024.

Resulting in seven excuse me, resulting in twelve fewer days trading in both the fourth quarter of twenty four and the full year '24.

When comparing to the prior periods. Given the disposal date, as of the end of the year, the entire tower portfolio, tenants, and lease amendments have been deconsolidated. Given our Kuwait disposal and our decision not to commence operations in Egypt, MENA will not be a reportable segment from Q1 twenty twenty five. Slide 17 looks at our returns and capital allocation. In 2024, we continue to focus on driving returns and deliver the return on invested capital of 15.8% versus 14.6% the prior year, Our improved 2024 ROIC reflects our narrowed focus on capital allocation and has benefited from, amongst other things, robust free cash flow generation, the impact of the naira devaluation and the disposal of our Kuwaiti operations. In terms of capital allocation, you can see that a significant portion of our spend in FY 'twenty four was related to discretionary CapEx outside of new sites. Followed by maintenance or nondiscretionary CapEx, and new site CapEx itself where we're a leading builder of new sites in Brazil. The $130,000,000 discretionary CapEx excluding new sites was largely spent on fiber rollout augmentation for colocation and lease amendments, and some other cost saving initiatives. Discretionary CapEx declined significantly from 2023 given our narrowed focus on capital allocation, and given the Project Green investment is now largely complete.

Moving to slide 18, and we look at the capital structure and its related items.

So at the end of the year, the end of twenty twenty four, we had approximately $3,900,000,000 of external debt in IFRS 16 lease liabilities. That's a reduction of approximately $240,000,000 versus the third quarter of twenty twenty four.

And of the $3,900,000,000 $2,200,000,000 represent our bond financings including our successful November 2024 $1,200,000,000 dual tranche senior notes refinancing.

In the other indebtedness line is our new $439,000,000 five year term loan refinance that we completed in October of twenty twenty four. And as Sam mentioned, these refinancings are evidence of a desire to continue to improve the strength and flexibility of our balance sheet which is a really important component of our strategic review. Through this new term loan in the senior notes, we've extended our twenty twenty five partial twenty six and twenty seven maturities out to 2029, 02/1930, and 2,031.

Also with the new South African rand tranche of our term loan, it swaps dollar obligations into local currency. As we seek to more closely match our debt FX exposure to our current revenue FX profile. And we believe we've managed to achieve this at manageable interest rates versus the previous debt it was replacing.

Cash and cash equivalents. Were $578,000,000 at the end of the year And in terms of where that cash is held, approximately 19% was held in Naira at our Nigeria business. And as we mentioned earlier, we've been upstreaming from Nigeria We upstreamed another $153,000,000 from Nigeria in the fourth quarter. Bringing the total from Nigeria to $271,000,000 for 2024 as a whole. While we continue to upstream in 2025, we do caution it remains to be determined if the increased dollar availability will be sustained. Consequently, from all these moving elements, at the end of the year, our consolidated net debt was down over $400,000,000 to $3,300,000,000 Our consolidated net leverage ratio came down 0.2 times to 3.7 times versus the end of the third quarter twenty twenty four. And as communicated last quarter, we expected leverage to drop following the realization of any disposals, and our 3.7 times net leverage ratio captures the impact of our Kuwait sale in December. Of twenty twenty four.

We expect leverage to remain within our target three to four times net leverage ratio in 2025 but continuing to drop organically during the year. Supplemented by any further disposals. Moving to slide 19, we're introducing 2025 guidance that shows further growth in our revenues when excluding the impact of the Kuwait disposal. Growth in adjusted EBITDA and also growth in ALFCF. It includes revenue in the range of $1,680,000,000 to $1,710,000,000 implying organic growth of 12% year on year at the midpoint of the range. Adjusted EBITDA in the range of $9,000,000 to $980,000,000 implying 4% growth at the midpoint ALFCF in the range of $350,000,000 to $370,000,000 implying 18% growth at the midpoint and total CapEx in the range of $260,000,000 to $290,000,000 So a few points I'd like to make here.

And number one, although it might be obvious, our 2025 guidance excludes any contribution from Kuwait. After its disposal at the end of twenty twenty four. And as a reminder, the MENA segment revenue in 2024 was $45,000,000 Secondly, I'll speak more about FX in a moment, but we include assumptions of continuing devaluation in the naira. Albeit much more moderate than what we saw in 2024.

And thirdly, our 2025 guidance includes the impact from the approximate 1,000 sites that were not renewed as part of the agreement with MTN Nigeria back in August of twenty twenty four.

With regards to CapEx, we anticipate to spend between $260,000,000 and $290,000,000 That's in line with our strategic priority of taking a narrow approach to capital deployment. And improving our cash flow generation. This CapEx range, includes a reduced BTS guidance versus previous years, is broadly in line with what we spent in 2024. And we believe enables us to still uphold our goal of maintaining double digit organic revenue growth in 2025. For the year, we expect to build approximately 500 towers including approximately 400 in Brazil. We continue to recognize the importance of maintaining a strong balance sheet and reiterate our net leverage target of three to four times albeit we expect to be within the bottom half of the range by year end. That's driven by adjusted EBITDA growth, and higher cash flow generation. Disposals will supplement this deleveraging as and when they complete. As I said, our guidance also reflects an expected significant increase in ALFCF in 2025, driven by adjusted EBITDA growth, narrowed capital allocation and lower withholding tax in Nigeria after the rate was reduced from 10% to 2% effective at the start of 2025. The bottom of the slide shows the average annual FX rate assumptions we've used in our 2025 guidance For the year, we're assuming an average rate of NIS1640 to the U. S. Dollar, which includes NIS1525 to the dollar in Q1 and then devaluation through the year to N1785 to the dollar by year end.

And finally, slide 20, we provide the estimated full year financial impact of a theoretical 10% devaluation or a appreciation in the naira and how that would would impact our financials. While our 2025 guidance already assumes an annual average of $16.40 naira to the dollar for the full year, Here, we've shown the impact of a 10% movement beyond what we've already assumed in guidance. The figures in the middle of the page, including the approximate 35% to $40,000,000 and 20,000,000 to $25,000,000 impact to revenue and adjusted EBITDA respectively provide a sense of what the twelve month run rate impact would be using our 2025 expectations. You'll see on the right side of the illustration in the middle of the page, excludes an incremental approximately $15,000,000 that could impact in the quarter of devaluation actually occurring. Assuming the devaluation was to occur at the beginning of the quarter. That represents the maximum lag that could occur between devaluation and when most of our FX resets would start to kick in at the beginning of the next quarter. And as a reminder, the vast majority of our resets are quarterly.

This now brings us to the end of our formal presentation. We thank you for your time today. And operator, please now open the line for questions.

Thank you.

Now begin the Q and A session.

Our first question for today comes from Richard Cho of JPMorgan.

Your line is now open. Please go ahead. Hi. I wanted to get an update on the Airtel new 10 ancies in Nigeria, how that's going, so far or and how much of that is planned for this year?

Richard, Good to hear from you. So, yeah, the SL contract is progressing. We've got quite a bit done in the second half of 2024 and that a lot of that comes through in 2025 and 2026. So we haven't kind of given specific guidance around numbers, but that contract is flowing. Nicely. As a reminder, most of that's collocation and five gs lease amendments. There is a little bit of BTS, a handful of sites in 2025 and 2026, but most of it's colocation lease amendments. Great. And then in talking about the potential for stock buybacks and dividend, is there a preference And how should we think about the timing of that evolving this year? Yeah. I mean, I think that continues to be under evaluation. What we have said for a little while is that we're in the process of disposing of 500,000,000 to $1,000,000,000 of assets that's ongoing.

And that's the first target. We want to get that done. Kuwait disposal was obviously a first step along that path.

And more work to do there. And then, you know, once we got a bit further into that, disposal program, then we'll look to, you know, reassess that that option. We've said [indiscernible] primarily be reduced by reducing debt. That remains the case. But then we are, you know, obviously starting to think through what a share buyback and dividend program could look like As a reminder, did we have had a small share buyback program in place We didn't utilize it for most of 2024. Given we were under strategic review. So there is a history of doing that. But there's no real preference at this point between those eventual capital allocation decisions between share buyback and dividend will we'll evaluate that over the coming months and quarters. Thank you. This is Hi, this is Sam. I do want to add something on the first question that you had on Airtel in Nigeria. Look, last year was a very tough year. I for for everyone. But as we're seeing now now Nigeria firing back, helped by the fact that there's maybe not tied or affected by The US tariffs new tariff policies? Its currency has increased by 7% since the November elections, It's it's it's probably the top performing currency in the world at the moment.

Stock markets in Nigeria are delivering 4% growth in dollar terms since the beginning of this year.

Better than many bigger markets, inflation is subsiding. So we've seen the carriers beginning to be more bullish about their CapEx plan. Both carriers the carriers have announced that. So we are extremely bullish about Nigeria at the moment, about the rollouts of both MTN and Airtel and others. And and you can see that in our numbers and in our guidance.

One follow-up with that, Sam. Do you expect the carriers because of the new tariffs to implement network spending this year that will help you IHS or is that more of a 2026 event?

Sorry. The what? I didn't get the question.

Well, the spending from the new tariffs by NCN and Airtel and other carriers, Do you think that's a an impact for 2025 or more for 2026? I believe it will be partly in 2025. It has to be partly in 2025. Because several of of of they have service quality of service and rollout. Soft rollout obligation in in my view. It it wasn't really published, but I do believe that the government would like to see better quality of service, better roll out roll out in certain areas, especially rural areas, So I do think it's not crystal clear at the moment, but I do think that we will see a positive impact this year also.

Great. Thank you. Thank you.

Our next question comes from Jim Schneider of Goldman Sachs. Your line is now open. Please go ahead.

Good morning. Thanks for taking my question. Just on the strategic review, you've obviously made very good progress on some of the portfolio optimization activities already. You're already within the high end maybe of your target leverage range. So maybe could you characterize much more is there to go in terms of portfolio options optimization? Are we more than halfway done here or are we even closer to that? To the end of that process? And then maybe you've been very clear about your desire to do either share backs and or dividend policy. Can you maybe talk about your appetite for incremental acquisitions of assets to maybe bolster your portfolio in areas where you already have a lot of scale?

For the question. So in terms of the first part, we've been pretty public and pretty consistent since May of last year that we were targeting $500,000,000 to $1,000,000,000 of asset disposals. We've done one around $230,000,000 for Kuwait. So that indicates we're not done yet. [indiscernible] we've managed to get through a significant amount of work and lots of progress in other areas as well last week as you heard Sam talk about earlier in the earnings call around the commercial side, the operational side. Specifically in relation to balance sheet, yes, we're now starting to see all of that cash flow generation and disposals come to fruition in reducing debt, reducing leverage. We're down at 3.7 times now. And I just make clear again, reiterate our target range is three to four times leverage, but we do expect to be in the bottom half of that range by the end of twenty twenty five. That's without any further disposals. So obviously, one would assume that future disposals would supplement that positively as well. So that's kind of where we are on that piece. In relation to wider capital allocation decisions, acquisitions not on the agenda at this point in time?

We're very focused on increasing cash flow generation, utilizing that cash for debt pay down, and more focused around potential share buyback and dividends in due course before we think again about acquisitions. But as we've said, we keep evaluating that through the course of the year. We're very pleased with where, you know, things have come operation in the business. And also macroeconomically starting to look better and better in a variety of markets. You know, we'll keep that under evaluation. But yeah. M and a is probably at the end of the queue at the moment. Helpful. Thanks. And then in the answer to the prior question, Sam, I think you referenced [indiscernible] the desire for MTN or other carriers in Nigeria or maybe start increasing CapEx spending as early as the end of this year and into next year. Can you maybe talk about maybe the one or two other markets where you see the most positive macro indicators and specific signals from carriers outside Nigeria where they might start to increase CapEx?

Thank you. Yeah, I'll take that. Sami can jump in as well. We're continuing to see decent momentum across a variety of African markets. They don't add up to as much as, you know, a big market like Nigeria, but we're continuing to see positive momentum, you know, the Francophone market Cameron and Cote D'Ivoire. With leasing activity via collocation and the one the new build sites, etcetera. So there's plenty going on in Africa, South Africa continues to sort of add incrementally. And even Brazil, Brazil's had a bit more macroeconomic softness in the last quarter or two. But even there, we're seeing some fundamental dynamics have shifted in the last six to twelve months in that market, which hopefully leads to a a much more positive near term outlook. We've been going through our workings with Oi and as of some of the other tower codes as well. That's kind of coming to a conclusion now. And what we're seeing is plenty of the carriers are looking at substantial five gs rollout. So although Brazil and LatAm has been a bit softer in quarters, can see where it could go and it's a positive longer term picture. Sam, I if you want to add anything.

I I think just just to reiterate that we really believe, after Africa could be a direct beneficiary of the impending tariff wars that that we're seeing happening between more markets that are integrated with US economy, because largely Africa is not integrated in terms of manufacturing or other large kind of like economic sectors. So we're seeing that. We're seeing the impact of of many of these policies that have or many of the issues that we seen, the macro issues that we've seen kinda, like, coming back out of it. So we're extremely bullish, and we believe the carriers will indeed increase their CapEx. The recent announcement indicated they are more bullish. It's more they're beginning to increase. So we expect to see much more in the coming few months. Thank you. Thank you.

Our next question comes from Michael Rollins of Citi. Thanks, and good morning. So first, thank you for adding into the revenue bridge the constant currency presentation disclosures.

I'm curious if you could share those constant currency performance metrics by region.

For 2024 and compare what those expectations are within the guidance by segment for 2025?

Mike, Well, you're welcome. I know it's something that you're after, so we added it into our disclosures. I I also know you like more and more We haven't put it in, in terms of the forward looking guidance for the year. That's something that we can maybe think through for future periods. But hopefully, it's helpful for people to see As we break down the various components of our growth, there's obviously quite a lot of moving parts. Especially given we have FX resets and the impact of FX given our emerging market currency exposure. So we try to simplify all that. It doesn't actually change the fundamental presentation of what we've shown to people before. In the revenue bridges, but obviously it just compartmentalizes elements stripping out that FX So we haven't given it for forward looking. Let us think through that. As to whether that's something that we could add in future. I don't see why not.

And maybe then just in the aggregate level, so if you look at what's implied in that 12% at the midpoint, are there some indications that you can give us on, like, you know, how much is coming from colocation and lease amendments, in aggregate for the portfolio? Versus your escalators or other components of the bridge, just to center around where the growth is coming from for the business in 2025 as it would compare to full year 'twenty four?

Yes. So if you look at if you look on our earnings presentation on slide 12, you see the FY 'twenty four bridge. And we just use that as a guide. So CPI for 'twenty five will be a little bit down, not too much down, but a little bit down versus that as we see inflation rates moderating. New sites roughly similar Colocation will be up versus that new lease amendments and fiber similar, maybe a little bit less, but certainly new collocations up And then other is really sort of the noise and that that would be next to next zero at this point in time as that's really twenty twenty three items that are flushing out in the comparables. So, yeah, not not too dissimilar, but a bit more focused on collocation is what we are forecasting and seeing in the markets Great. And I apologize if I missed this. In the commentary. On Slide 19, the CapEx range of $260,000,000 to $290,000,000 how much of that is recurring CapEx that's included in the ALFCF definition And how much of that is CapEx?

It's about a third. About a third of that CapEx is is maintenance. Which gets you to sort of you know, within sort of ranges midpoints about $175,000,000 of maintenance CapEx. And if you remember from the end of last year, we've been guiding sort of 24,000,000 to $25,000,000 per quarter of maintenance CapEx. We've obviously disposed of the business and some other work we've been doing. So we're trending at little bit lower than that, about $22,000,000 $23,000,000 a quarter. At this point in time for maintenance CapEx.

And just the last question, as you think about your different markets, industry structure, possible consolidations, is there anything that you want to flag for us that's left in terms of possible churn in the business over the next few years that we all should be mindful of?

Well, I think everybody's aware of the MTAN Nigeria piece, is playing out through the course of 2025. And that was well signposted last year. But other than that, no, we're not seeing anything else You know, we're seeing positive leasing trend across all major markets.

So yeah, more of a positive picture, to be honest.

Michael, at the moment, we we all our contracts are are are renewed into the twenty thirties. At the moment, we've got more than 12,000,000,000 or $13,000,000,000 Steve, of contracted revenue [indiscernible] but our our exposure to oil in Brazil at the moment is less than 1%, if if any. So we feel extremely confident and comfortable with where we stand.

Thanks very much. Thank you.

Next question comes from Gustavo Campos of Jefferies.

Gustavo, your line is now open. Please go ahead.

Hello. Yes. Congratulations on the results, and thank you very much for the presentation. And all the details. My first question is again, sorry to follow-up on the as disposals. I just wanted some confirmation if you were still gonna adhere to your previous 500,000,000.0 to $1,000,000,000 target for asset sales And as far as your your portfolio selection for these asset sales, what what will be the the broader criteria? Any any specific geographies or types of assets that you are targeting here? Any Any color on that would be very helpful. That's my first question. Thank you.

So yes, the $500,000,000 to $1,000,000,000 range is still the target. So that's fairly straightforward. We're working hard on that. And in terms of portfolio selection or market selection, we've also said historically that it could include things like minority stakes. For example. So we weren't sort of ruling out a number of different value realization opportunities. We haven't been specific on markets. Clearly, we're looking to highlight the value of IHS versus its share price performance. So we are looking at a number of different opportunities and we'll keep people up updated. We don't want to be negotiating these transactions in the public domain, so you'd appreciate we're not gonna give too much information on know, live discussions.

I I may add also, mister, for at the end of the day, the the reason we are conducting the strategic review review is that we believe that we remain undervalued. We have sold a couple of asset portfolios at almost what, three times the multiples we are given by the public markets. I mean, Kuwait sold for 14.2 at the moment at roughly five more or less at So we believe that is an important thing that want to put out there. Nigeria is coming back. Things are changing. That's why I think it's very important to stay current and keep recalibrating our view taking into account all the new positive realities that we are seeing. Also, if I may add more observations, the performance in terms of cash flow generation has has materially improved in the last year as we are introducing new ways, new operating methods, new operating many of which are using artificial intelligence in the way we distribute diesel, in the the way we plan our operations on on-site. And this has had also a very positive impact on our cash flow generation. So we're comfortable where things are at the moment, but yes, to to Steve's point, we are continue with what we have promised the mark.

Understood. Yes. Thank thank you very much. That that is very clear. And if you mind, if I just clarify here, is this 0 point half a billion to a billion dollar target? Is this enterprise value or is this like [indiscernible] you are you're targeting to to receive? Thank you.

Yeah. Proceeds to receive.

Okay. Yeah. Thank thank you. My second question would be around you were expecting to generate more positive free cash flow and and potentially, like, deleverage more. To the bottom half of your target, as you mentioned. Would you have by chance like a total debt target that you are expecting to be by the end of the year? And as far as is there, like, are you expecting to like, have a a 10 a tender offer on your bonds? [indiscernible] maturities or part of your capital structure that you're planning to target?

No specific debt number in mind other than making sure that the leverage down. That will obviously depend a little bit on the activity through the course of the year, including potential future M and A disposals as we've discussed. But we've been clear, we want to get the leverage down to the bottom end of our target range. So that's the goal. In terms of where excess cash gets utilized, obviously, bonds are a significant part of our capital structure. I obviously wouldn't want to say anything to do with tender offers or anything like that. But there's a number of bonds that are either in call periods or coming into call periods. Which is obviously an important consideration. We also have other debt in the structure outside of the bonds, which we could consider utilizing excess cash for.

So we have a number of different options available to us to utilize cash you know, as it as it comes through to us.

That is very clear and very helpful. And my last question would be on working capital. We saw around $200,000,000 in receivables outflows in fiscal year twenty twenty four. Although there was like a material improvement in the fourth quarter What are your expectations for 2025? Should should we see, like, similar outflow pressure or are you expecting an improvement with given your updates on your commercial agreements, etcetera? That's my last question. Thank you. Yes, exactly.

So yeah, so as you point out, so there's significant, excuse me, improvement in Q4 with a pretty material work capital inflow. In quarter four, which has reversed the trend. So outflows have been slowing through the course of 2024 and then now back in positive territory in in Q4. So I expect some continued momentum in that early part of the year, and we're forecasting particular working capital outflows in 2025 at all. Always be a little bit of movement between the quarters, but from a total 2025 perspective, no, no work capital outflow forecast.

Okay. Thank you. So you're just to clarify, your expectations to be roughly working capital neutral in 2025.

Yeah. Flat to positive.

Yep.

Alright.

Perfect. Thank you very much. And congrats again.

Thank you.

Thank you.

Our next question comes from Stella Bridge of Barclays.

Hi there, everyone. Many thanks for all the updates. And I I wonder if I could just ask about Rwanda. So you were touching before on some of the outlook for some of your markets. I mean, after this these recent developments in DRC, there's been a little bit of political pressure on Rwanda. I was just wondering if there was anything you were monitoring there in terms of risk to the business, your perhaps around currency or upstreaming or, you know, anything that would be relevant for you, that would be great. Thanks.

Hi, Stella. No. Nothing nothing too untoward, to be honest. Obviously, you know, we're monitoring that as a sort of a geopolitical situation. But no impact on our business. Either operationally, financially, from an FX perspective, etcetera. [indiscernible] you know, watching, but no nothing nothing untoward. No impact on business.

Okay. Thanks for clarifying. That's all for me.

Thank you.

That brings us to the end of the IHS Holding Limited fourth quarter and full year 2024 earnings results call. Should you have any questions, please contact the Investor Relations team by the e mail address investorrelations@ihstowers.com. The management team, thank you for your participation today. And wish you a good day. Thank you.