Good day and welcome to the IHS Holding Limited Results Call for the 3-month period and Full Year ended December 31, 2021. 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 new SVP of Communications here at IHS. With me today are Sam Darwish, the Chairman and CEO of IHS Towers; Adam Walker, CFO; and Steve Howden, Deputy CFO.

This morning we published our financial statements for the 3-month period fiscal year ended December 31, 2021 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.

For we discussed the results, I'd like to draw your attention to the disclaimer set out at the beginning of the presentation documents 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 annual report on Form 20-F.

In particular, the information to be discussed may contain forward-looking statements, which by nature, evolved 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 results 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 20-F filed with the Securities and Exchange Commission today, and our other filings with the SEC.

We will 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. Welcome, everyone. Thanks for joining our Q4 and the financial year 2021 earnings results call. The second such call following our listing on the New York Stock Exchange last October. Welcome also to Colby, who just joined us at the start of March.

Today I'm going to run through our 2021 highlights, an amazing year for IHS and also touch on how we are building a global digital infrastructure company that we believe will deliver long-term growth and value creation for our shareholders.

I will also discuss how our focus on sustainability is core to our business model, a focus that has been at the heart of IHS since I founded the company in 2001. Then I will turn things over to Adam and Steve to take you through the results in greater details, after which we will open the line for Q&A.

Slide 4 of the presentation highlights IHS key accomplishments in 2021, many of which occurred during the fourth quarter, a very exciting time for us. As the leading independent multinational company focused solely on emerging markets, IHS ended 2021 with over 31,000 Towers spanning nine countries on three continents.

We continue to focus intently on executing our organic and inorganic growth strategy, including our objectives to further diversify our asset base and lower our cost of capital. And we are pleased with the multiple steps we’ve taken recently in support of this strategy.

With our current and near-term growth driven largely by the implementation of 4G in our main markets of Nigeria and Brazil, we are very happy to see that 5G is now on the horizon as well. And our recent acquisitions are all designed to position IHS to benefit from the coming technological transition.

In addition to our October IPO on the New York Stock Exchange that brought new equity capital and public shareholders into the company, IHS executed a successful $1 billion bond offering and refinancing in November, which lowered our cost of debt and cost of capital.

In terms of entering new geographies, IHS also undertook several important steps in Q4 to diversify into attractive markets in a disciplined fashion. In October, we entered Egypt through a licensed partnership, and we are in discussions with the carriers there regarding commercial opportunities.

More significantly, in November, we announced an agreement to acquire approximately 5,700 towers in South Africa from MTN which will make IHS the leading independent TowerCo in Africa's most advanced economy. Together, Egypt and South Africa have over 160 million in total population.

These two transactions further -- transactions further cement IHS stature as the leading power company on the African continent. As we will now be serving the three largest economies and important 5G is starting to become a reality in our markets. Nigeria just recently started issuing spectrum and South Africa is expected to do that shortly.

In Brazil, where 5G spectrum has also just been auctioned, we closed the TIM fiber transaction early in November to create I-Systems, a leading fiber company in Brazil. The transaction further builds upon our entry into LatAm, which included the acquisitions of Skysites and Centennial Brazil and Colombia earlier in 2021.

Moreover, we have continued our Brazilian growth in 2022, as we announced an agreement in January to acquire the GTS SP5 portfolio of more than 2,000 towers that complements our existing tower portfolio. When GTS closes imminently, IHS will have over 7,000 towers and a fiber network in LatAm in just over 2 years following our strategic entry there.

I'm also delighted with the financial performance of the Group in 2021. In financial year '21, we delivered 12.6% reported growth and 16.1% on an organic basis versus financial year '20.

Demand for communications continues to grow globally, and our two principal customers in Nigeria again announced strong results this past quarter driven particularly by data uptake. In 2021, IHS added 3,236 net towers, including 1,348 we constructed ourselves, as well as 3,550 tenants and 9,141 new lease amendments.

Moreover, we expanded our EBITDA margin in 2021 versus '20, even in the face of rising energy prices versus the lows of 2020. Overall, we remain pleased regarding our financial position and the significant opportunities ahead of us.

Although as you will hear from Adam and Steve, we are focused on mitigating the impact of the increased macro volatility.

We are seeing in our markets in the form of higher energy prices, upward inflationary pressures, rising interest rates and supply chain disruptions, not to mention the increased global political uncertainty from Russia's invasion of Ukraine, of course.

As for COVID, while we’ve experienced no material financial impacts from it, we remain vigilant regarding its potential impact. On this front and beyond, we continue to broaden and deepen our commitment to sustainability through numerous initiative that I will discuss shortly, in greater details.

I mentioned earlier that I will discuss some of the steps we are taking to build a world-class global company in the digital infrastructure. So, I wanted to highlight some of the senior members of the IHS team who have joined us recently, as we work to take our company to the next level.

As you heard Colby Synesael joined us two weeks ago from Cowen as Senior Vice President of Communications to direct our Investor Relations and Communications Program and serve on the executive committee.

Colby was most recently the number two ranked Research Analyst in the communications infrastructure sector in the U.S where he covered American Tower, SBA, Crown Castle, among other top companies.

We anticipate participating in more Investor Events to enable investors to become familiar with the team, our company and our strategy, and we look forward to continuing to engage with investors. Furthermore, Bill Bates joined IHS at the start of 2022, as Senior Vice President and Chief Strategy Officer and a member of the Executive Committee.

Bill will be responsible for the Group's organic and inorganic strategy, running the M&A and commercial functions, while complementing Steve's previously announced transition to CFO starting April the 1st upon Adam's retirement.

Bill brings over 20 years experience in the telecommunications sector, and was instrumental in driving international growth throughout emerging markets for SBA communications during his 15 years there. Finally, I'll be remiss if I didn't specifically thank Adam Walker, our CFO on this, his last earnings call before his retirement on March 31.

Ending an executive career during which, he has served as Group CFO for 20 years consecutively, culminating in his contribution to IHS during the last 5 years with us.

Adam was instrumental in building out a public company level corporate reporting and finance function on a global scale and guiding IHS through our multiple bond issuances and recent IPO, as well as serving on the executive committee. I congratulate Adam on his retirement, of course, and welcome Steve to the role of the CFO.

Turning to Slide 5, IHS entered its 21st year of operations in a strong position and firmly focused on executing a strategy of becoming the world's leading digital infrastructure company targeting emerging markets. I mentioned the South African and GTS acquisitions in the last slide, but saved the punch line for here.

I am proud to say that pro forma for the anticipated closure of these transactions, IHS will become the third largest independent multinational tower company globally by tower count, based on the current market with nearly 39,000 towers across 11 countries in Africa, LatAm and the Middle East that collectively serve over 760 million people.

Not only we are the largest multinational tower product solely targets emerging markets on a global level, IHS will be pro forma the market leading independent TowerCo in 8 out of our 11 countries, and then the third largest in Brazil.

Our commitment to Africa is as strong as ever, as you can see from the South African deal, but we are also excited to be further building upon our successful 2022 entry -- 2020 entry into LatAm and MENA as demonstrated by the Skysites, Centennial I-Systems, and GTS transactions in LatAm and our entry into Egypt, of course.

The markets in which we operate have attractive population growth and rely on wireless for connectivity, but are behind the developed world in terms of wireless technology.

The majority of our markets are still running out 4G, although 5G is now out there on the horizon in several key markets for us, which is exciting news for us in terms of future organic growth opportunities. Nigeria today, for example, is only 41%, 3G, 4G penetrated.

Although in December, the country conducted its first auction of 5G spectrum to enable the winning carriers to begin to develop the technology locally. We expect to see proof-of-concept type rollouts in 2022, which we already have orders, with commercial rollouts beginning in 2023 and onwards.

In Brazil, we also saw 5G spectrum allocation takes place in November, where the three key carriers, TIM, Vivo and Claro each secured 5G spectrum. As people will have seen more recently, the old mobile breakup has now received regulatory and competition approval and has enhanced the way for the three carriers to integrate that carrier consolidation.

We believe this will provide further momentum in the communications infrastructure landscape in Brazil. And while we have de minimis mobile exposure, we believe the old mobile breakout will pave the way for the remaining carriers to reinvigorate the rollout plans now that they know the shape of the respective networks.

These wireless technology trends drive our organic growth prospects as we provide colocation lease amendments and new sites to carriers. On Slide 6, I wanted to highlight our historical growth and summarize our strategy.

As you can see, our long-term revenue CAGR through 2021 is nearly 12% in dollar terms, and our EBITDA CAGR is over 19%, reflecting the attractive growth drivers in our markets I mentioned earlier, as well as our diversification program starting in 2020. As I have noted before, our business model is very similar to the U.S.

TowerCo model, while our emerging markets footprint provides us access to attractive secular growth going forward. There are two critical elements of our strategy.

First, we will continue to grow organic, focusing on leasing up our existing towers through colocation, and improving margins through lease amendments, as our customers add new technologies to support the offerings.

We are fundamentally at towers business, but we plan to continue to enhance our revenue through other services such as fiber, data centers, small cells, DAS, rural. In other words, ancillary telecom infrastructure that fits our business model and our return expectations and helps us further embed with the customers by providing solutions they need.

Second, we continue to look to diversify our asset base through adding new portfolios of towers, as our diversification strategy is aimed at growth, but also lowering our group cost of capital. We understand that investors would prefer to see Nigeria as a smaller portion of our overall business, but this won't happen overnight.

As Nigeria has its own very strong growth characteristics which we love and we are and will be disciplined in executing our inorganic growth strategy.

Broadly, we look to acquire towers from the carriers as we have done successfully in the past, or to buy existing TowerCos as we have also done several times, or to enter new markets by focusing on BTS for carriers as we have -- as we are doing in Egypt at the moment.

Communications infrastructure is a huge landscape of opportunity, and we believe that there are very, very few other companies that are focused on emerging markets globally, like we are. Finally, for me on Slide 7, I mentioned that our focus is not just on financial performance, but also on sustainability, which is at the core of our business.

First and foremost, we believe that our business model is inherently sustainable, and that we deliver shared infrastructure solutions that promote digital connectivity and inclusion and improve the lives of the communities we serve.

This encourages greater access to education, health care, and financial and government services, while the infrastructure sharing reduces the environmental footprint of the telecom landscape in our geographies.

Imagine the potential differences in the lives of the inhabitants of a small village in Nigeria, after gaining access to the internet, and what that could mean for improving their wellbeing as they access such service -- such services.

Not to mention the potential positive environmental impact from increased telecommunications and less driving, it can feel that sometimes the S in ESG doesn't receive as much attention from others compared to the E, for example, but it's a crucial focus of ours, and a benefit delivered by our business model.

In 2021, and Q4, we continue to advance our ESG efforts on multiple fronts across our markets, delivering numerous initiatives devoted to education, health care, infrastructure, and combating COVID-19 as we have been doing for many years. We are also gratified to have been recognized on multiple occasions for this work in our communities.

Importantly, in September, we launched the Frontline Workers Initiative, the program through which we will pay for the entirety of a college education at the top school for the qualifying children of those of our employees who have worked so hard during the pandemic to maintain the towers and network performance in such a difficult period.

We recognize their efforts. We already have students enrolled in the program across 7 universities at the moment, and I believe that education is empowering and life changing. And through this initiative, we are creating opportunities that simply do not exist for many children in our markets. I'm very, very proud about this project in particular.

Furthermore, I am pleased to highlight that in January 2022, we expanded our partnership with UNICEF to the group level, announcing a 3-year international partnership to support the Giga initiative objective to map the internet connectivity of all schools worldwide.

Through this 3-year partnership with UNICEF, which also includes a contribution of 4 -- $4.5 million, the IHS team will work closely with Giga to help strengthen its work mapping schools and their connectivity levels on an open-source map using machine learning and satellite imagery.

Importantly, on the environmental front, we have continued evolving the analysis of our Scope 1 and Scope 2 greenhouse gas emissions in connection with developing a carbon emissions reduction strategy that we anticipate announcing in 2022, investing further to replace diesel generation where we can with the latest renewable technology not only makes environmental sense to reduce direct CO2 emissions, but it also makes smart business sense in terms of our desire to drive OpEx and CapEx out of the business.

We look forward to sharing our progress on this topic with you later this year. As I believe strongly and I have said repeatedly in emerging markets, there is no way you can become a scale unless you operate as a long-term sustainable business. You need to be accretive to your environment as the resources around are limited.

This is not a tick box exercise for us and its -- but it's something that I'm very passionate about. I look forward to sharing our fourth annual sustainability report with you in Q2 and to future announcements in this area. And with that, I will turn the presentation over to Adam and Steve to walk you through the results..

Thanks, Sam and hello, everyone. Today I will cover our key tower, tenant and lease amendment KPIs and discuss our revenue EBITDA and RLFCF results for the year just ended. Turning to Slide 8, as mentioned, the business performed really well in 2021. And you can see our towers, tenants and lease amendments have all increased versus the prior year.

Moreover, IHS delivered double-digit growth in both consolidated revenue and adjusted EBITDA in 2021 versus 2020, whilst expanding our EBITDA margins and our recurring leverage free cash flow grew by 8% versus the prior year.

Our level of investment to CapEx to grow the business organically increased by over 75%, and given our high levels of cash generation our consolidated net leverage ratio has decreased versus the prior year, despite the inorganic activity. Turning to Slide 9, our tower count is now over 31,000, up by over 3,000.

This was driven largely by our acquisitions in LatAm, and the ongoing new site programs there as well as the new sites activity in Nigeria, with both new build programs accounting for most of more than 1,300 towers that we built during the year, 597 of which in Nigeria, and 600 in LatAm.

Please note that unlike the U.S., our markets have characteristically de minimis churn. Total tenants grew 8.3% year-on-year to 46,414, with a colocation rate of 1.5. Two things to remember in relation to the colocation rates, which we define as total number of tenants divided by total number of towers.

First, lease amendments, which are a significant factor in the growth in our Nigerian segment are not included. Second, when you are a significant acquirer and builder of towers, as we are, then you are typically adding to the denominator period-on-period even as we continue to lease up the more mature parts of our portfolio.

We see no reason why we can't get to 2x or greater on our overall portfolio over the long-term as our more mature portfolios of towers currently are. Lease amendments increased by over 50% year-on-year as our customers added equipment to their sites, particularly 3G and 4G upgrades in Nigeria.

On Slide 10, you can see our consolidated revenue for both Q4 and full year '21. In the full year and in Q4, IHS delivered both double-digit reported and organic revenue growth. For the year '21, reported revenue of almost $1.6 billion grew by 12.6% and full year organic revenue growth was 16.1%.

It has been another strong year for top line growth led by Nigeria and LatAm. As a reminder, in the chart, we've called out the $24 million of revenue recognized in Q2 '21, which although normal course of business, as previously discussed, nevertheless conflated the usual quarterly run rate.

Overall, we continue to grow well in line with our stated objective of seeking double-digit revenue growth on an annual basis in dollar terms. And Steve will shortly discuss our guidance on this metric and others for 2022. Slide 11 has the components of our revenue growth.

Organic revenue growth was driven primarily by lease amendments, escalators and FX resets, as well as new colocations and new sites with the escalators and FX resets together more than offsetting the negative FX impact of 6%.

Inorganic growth was 2.4% and included the Skysites, Centennial and TIM 5 acquisitions in LatAm and the acquisition of an additional 162 sites in Rwanda, and 193, in Kuwait, pursuant to our 2020 purchase from Zain, all of which we've previously discussed.

The Q4 comparison which is shown in your appendix shows our organic revenue growth of 14.5%, inorganic growth of 3.2% and a negative 5.6% impact from FX. Slide 12 covers adjusted EBITDA and adjusted EBITDA margins.

In the full year, we generated strong consolidated adjusted EBITDA margins, although these results were impacted by higher power generation costs as we anticipated and have discussed previously, as well as incremental costs associated with our transition to public company like.

Adjusted EBITDA in the full year was $926 million, a 13.1% increase on 2020 and adjusted EBITDA margin was 58.6%, up from 58.4% last year. Again, we point out that this year includes a $61 million impact in Q2 relating to the $24 million revenue I just mentioned, and a $37 million bad debt reserve release that again we previously disclosed.

The increase in adjusted EBITDA primarily reflects the increase in revenue, partially offset with year-on-year increases in cost of sales mainly due to higher power generation costs and increased staff costs and professional fees.

Power generation cost of sales increased by $51 million, primarily in our Nigeria segment, due to a 32% higher U.S dollar denominated cost of diesel as well as a 14% year-on-year increase in overall consumption, resulting from increased tenant and lease amendment activity.

We continue to mitigate the pressure of the increase in oil prices by forward buying where possible, looking at both international and local suppliers as well as prioritizing alternative sources of power solutions to reduce our overall dependency on diesel.

More to come from Steve shortly on power costs and thoughts for 2022, given the recent increase in crude prices.

In terms of Q4, we generated adjusted EBITDA of $270 million, a 0.9% increase, adjusted EBITDA margin decreased to 52.1% from 57.9% due to the concentration in the quarter of the increased public company costs and also higher power generation costs.

On Slide 13, we review our recurring levered free cash flow, which we report in a manner consistent with our U.S peers. We generated RLFCF of $406 million in full year '21, an increase of $31 million or 8.4%. But this does include the $61 million positive impact that I've just called out.

While adjusted EBITDA was higher for the year as discussed, this growth was partially offset by a $19 million increase in revenue withholding tax due to higher revenue growth in Nigeria, higher lease payments to support growth and higher taxes due to expiring tax credits.

It also includes high interest cost from the new bond we issued in Q4 and an increase in the Nigerian education tax rates. Our RLFCF cash conversion was 43.8%.

In terms of Q4, RLFCF was $88 million, a decrease from the prior period, driven largely by the timing of maintenance CapEx incurred in Q4 '20, as well as higher lease payments in the current period, resulting from the assets acquired during 2021.

Additionally, interest was impacted negatively by $10 million from our bond transaction in Q4, from early settlement of accrued interest on the prior bonds and the increased interest quantum on the new bonds. Our RLFCF cash conversion rate decreased to 40.4% as a result.

And with that, just as I should be relinquishing all matters CFO wise formally in 2 weeks time, let me pass the baton to Steve to take you through the rest of the presentation..

Thanks, Adam. Onto Slide 14, you see the CapEx was $402 million for FY '21, a 76% increase versus last year, primarily due to us investing in the business for growth.

Driving the increase was increased augmentation in new site CapEx in Nigeria, in connection with lease amendments delivered for our customers and for our rural solution, as well as the increased new site CapEx in LatAm. CapEx was $151 million in Q4, 131% increase versus last year's period, in light of the same drivers just mentioned.

However, as we discussed in our Q3 call, we did underspend in terms of CapEx during the year as a result of the global supply chain issues rippling across our markets.

Similar to companies around the world, we are seeing a slowdown in the supply chain continue into 2022, which we are trying to mitigate by ordering equipment earlier in some cases 1 to 3 months earlier. Financially speaking, this impact is small and has been factored into our guidance for FY '22.

But noting the continued uncertain macroeconomic world, in which we live at the moment. Slide 15 looks at our returns and capital allocation. In FY '21, we continue to focus on driving our returns and delivered a return on invested capital of 11.2%.

We invested significantly in both organic and inorganic growth opportunities during the year, including new site build investment in Nigeria and LatAm, closing and integrating the acquisition in LatAm, albeit with only partial contributions in the year from some of those acquisitions.

In terms of capital allocation, you can see on the right that a significant portion of our FY '21 spend of $401 million related to acquisition investment, and this was deployed to build upon our 2020 entry into LatAm.

As Sam mentioned earlier, we believe the Brazilian business were built through these acquisitions and the forthcoming GTS transaction is very well-positioned for the upcoming rollout of 5G, which commenced recently. Moreover, IHS continues to be a leading builder of new sites in the country, the 600 such sites built during the course of last year.

Our investment in Nigeria also constituted much of the new site and discretionary CapEx last year, given our large footprint in the country and the underlying growth opportunities in the market. Turning to the segmental review on Slide 16, we look at our Nigerian business.

The Nigerian macroeconomic environment in Q4 continued slight improvement with GDP growth coming in at around 3.4% for 2021. However, inflation increased to 17% for the year versus 13.3% for 2020, and FX currency rate ended Q4 at 435 to the dollar, although it did normalize back to 415 since.

Whilst FX reserves have increased to $40 billion at the end of the year, from $36.5 billion at the end of Q3. As we know, Brent crude oil price has been moving significantly, and that's sort of $77 per barrel at the end of 2021, up nearly 50% from the end of 2020, which should ultimately have a beneficial impact for the Nigerian economy.

Telecommunications remains an important part of the Nigerian economy accounting for around 11.9% of GDP in Q3 last year. Against this backdrop, our business once again delivered strong results tracking well on our key metrics. Top line growth continues to be driven by new sites by escalations, by colocation and by new lease amendments.

Our tower count at the end of FY '21 grew by 317 versus FY '20, driven in part by the delivery of our new rural solution for major customer, although partly offset by plant decommissioning, as well as de minimis churn. Our total tenant count increased by 3.2% for the year, and our colocation rate was up 1.52x.

Lease amendments continue to be a strong driver of growth these increasing by 52% year-on-year, as our customers added additional equipment to our sites, particularly 3G and 4G upgrades. Our improved operational performance is reflected in our Nigerian financial results.

FY '21 revenue of $1.15 billion increased 10.5% year-on-year on a reported basis and almost 19% on an organic basis. FY '21 adjusted EBITDA was $784 million, an almost 12% increase from the prior year period, and adjusted EBITDA margin was 68.3%.

This year-on-year increase is primarily due to the revenue growth, including the non-recurring items as described before, but partially offset by an increase in power generation costs of $51 million, and an increase in regulatory permit costs and security services of $13.8 million and $3.4 million, respectively.

Slide 17 presents the results of our other segments. In Sub-Saharan Africa, tower and tenants was 7,878 and 13,416 at the year-end and revenue and adjusted EBITDA was $344 million and $91 million, respectively, with an adjusted EBITDA margin of 55.4%.

As we have mentioned, our LatAm and MENA segments are new as of February 2020 and we completed the three additional acquisitions in LatAm during the course of last year. As such, the year-on-year comparison reflects meaningful inorganic growth, which we expect to continue in 2022 with the GTS acquisition.

In Brazil, our second largest market with 4,630 towers, macro conditions were somewhat neutral as FX rates and inflation stabilized, but we have seen interest rates rising materially in Brazil.

In our LatAm segment overall, towers and tenants were 4,909 and 5,961 at year-end and revenue and adjusted EBITDA was $60 million and $43 million, respectively, with adjusted EBITDA margin of 71.5%.

In MENA, towers and tenants were 1,402 and 1,416 and 2021 revenue and adjusted EBITDA were $29 million and $13 million, respectively, with an adjusted EBITDA margin of 44.6%. On Slide 18, we look at our capital structure.

At 31 December, we had approximately $3 billion of external debt and IFRS 16 liabilities, up from year-end 2020 following our $1 billion bond offering in November. The offering IHS issued $500 million of 5.65% Senior notes due 2026, add another $500 million of 6.25% senior notes due 2028.

And we used a portion of the proceeds to refinance our $510 million outstanding 7.124% senior notes. Consequently, of the $3 billion of debt, $1.94 billion are our bonds and approximately $381 million senior credit facilities at our Nigeria segment.

We increased our Group revolving credit facility to $278 million upon consummation of our IPO this past October. Cash and cash equivalents increased $916 million at year-end, following the October IPO and the November bond transaction.

In terms of where that cash is held, approximately $645 million was held in dollars almost entirely at the Group level. Next up $81 million of equivalent was held in Naira at our Nigeria business, and the remaining cash was held in local currency across our other markets, primarily Cameroon and Brazil.

In terms of upstreaming cash during the year, we upstreamed $171 million of cash from Nigeria to Group including $121 million for bond coupon payments, with a total sourced at a weighted average rate of NGN479 to the dollar.

H2 sourcing accounted for $100 million of this and we've seen US dollar availability in Nigeria tighten somewhat during the second half of the year and that's continued into 2022.

Although we are closely monitoring the situation, and believe that the continued high oil price together with the $4 billion Nigerian sovereign issue in September last year, should lead to improved U.S dollar availability later in 2022.

As U.S dollar supplies reduced in recent months, we've started to look at sourcing larger amounts directly from our local banks using funded forwards. We also continue to use non-deliverable forwards around the bond coupon payments to hedge against Naira devaluation in the interim.

Outside of Nigeria we upstreamed $45 million of cash from our SSA segment during the year. Our consolidated net leverage was approximately $2.1 billion with a consolidated net leverage ratio of 2.2x.

While this is below our net leverage target range of 3x to 4x, again indicating the strength of our balance sheet, this ratio would increase to approximately 3x of the year-end pro forma for the payment of both South African and GTS acquisitions and the related financing we expect to utilize. Slide 19.

This details the key strategic growth initiatives that we've recently announced or close, which Sam has previously highlighted, so I'll just add a couple of points. Regarding the GTS deal, we expect that to close imminently.

And in terms of South Africa, we expect the closing to be Q1 or possibly Q2, pending ongoing discussions with the Competition Commission. Regarding Egypt, our integration and commercial teams are already on the ground and we've commenced discussions with the carriers.

No further significant news to report at this point, but we will keep everyone updated as we progress. On to Slide 20, we introduce our guidance for FY '22. Before discussing the specific metrics and targets, I'll walk you through some of the key assumptions behind our guidance.

First off, for 2022, this includes contribution from the GTS acquisition, starting in Q2 this year, including approximately $100 million of local debt on the business. As we previously disclosed, we guided that the GTS assets generate revenue and EBITDA of approximately $38 million and $36 million in the first full year of operation post-closing.

Guidance, however, does not include the impact of the South Africa transaction or expectations regarding the commercial rollout in Egypt. Regarding South Africa, we previously indicated, we expect the assets to generate revenue and EBITDA of approximately $220 million and $80 million again in its first full year of operation post-closing.

However, given the precise timing of the closings and we will update our guidance to include these on a future earnings call. As for Egypt, as I said, the carriers -- the discussions with the carriers are ongoing, and we will update you as we make progress.

Other key things to highlight are the incremental net $23 million of interest costs following the recent bond transaction, as well as non-recurring items in FY 2021 mentioned previously, as you think about the comparisons this past year. Oil and FX we'll come to in in a short moment.

Taking all of this into account, we believe that revenue for FY '22 will range between $1.795 billion and $1.815 billion on a reported basis, which represents a 14% increase at the midpoint of the range from our FY '21 revenue of $1.58 billion.

Key drivers of this growth include our organic growth programs in all of our markets, and particularly our projections for new site growth in Nigeria and Brazil, as you see outlined on the page as well as the full year contributions from I-Systems and then the GTS assets in Brazil.

In terms of adjusted EBITDA, we are projecting a range between $960 million and $990 million. Key drivers of the EBITDA forecast, obviously the revenue growth aspects just mentioned as well as the negative impact of oil price at $120 per barrel for Q2 to Q4, which is our assumption.

With respect to recurring levered free cash flow, we are projecting it to range between $310 million and $330 million. Here the key point is that we are carrying the $23 million increased interest costs from the recent bond for the whole year of 2022.

But GTS only kicking in Q2, and the guidance, as we said reflects no assumptions yet regarding South Africa and Egypt contribution. Clearly, the oil price impact on our diesel spend drops straight down into RLFCF too.

One of the things to keep in mind about our RLFCF metric from a comparability perspective is that the Nigerian withholding tax comes off revenue as opposed to operating profit, which means there is an outsize impact as we grow the top line in our largest market.

In terms of CapEx, we are anticipating spending $500 million to $540 million of CapEx in 2022, which includes new site CapEx in connection with the build programs as well as discretionary and non-discretionary CapEx.

We are monitoring the ongoing supply chain precious closely which could impact this projected CapEx, and we will keep you updated on the subject through the course of the year. On Slide 21, we discussed the key energy costs and FX sensitivities regarding our guidance.

With respect to the oil price, our guidance assumes an oil price of $99 per barrel for Q1 of this year, and $120 a barrel for Q2 to Q4. The Russian invasion of Ukraine has introduced tremendous uncertainty into oil price forecasting, and the spot price has been as high as 135 recently.

Consequently, we thought it prudent to employ $120 assumption for the remainder of the year that things will evolve, and we will update you quarterly on this metric. From a sensitivity perspective, we believe that a $5 move in the price of crude would have a $7 million impact on EBITDA.

Although as previously mentioned, we take various steps to try and mitigate this impact. In terms of FX sensitivity, a 5% devaluation in the Naira from a starting assumption of an average of NGN439 to the $1, we will have about a negative $30 million impact on revenue and a negative $19 million impact on EBITDA.

On Slide 22, just a bit more detail on how energy costs impact our business. As you know we provide power management services to our customers principally in Africa. And in Nigeria, the grid has historically been non-existent or unreliable. Therefore, the cost of fuel can cut both ways in terms of our returns.

First in a positive fashion, either in a falling price environment as we saw during much of 2020 or as we implement renewable power solutions to increase efficiency and bring down the CapEx costs associated with power generation, whilst charging a fixed use fee to our customers, or converted in a rising price environment like we're seeing today, the diesel input cost can be a headwind, albeit one that we work to manage through smart sourcing and inventory management.

As you see on the slide, the cost of diesel these was reflected in our cost of goods sold and equated to 14% of revenue last year. Although 5% of revenue was also linked to diesel through power indexation clauses, and was hence pass through to customers. As we look at our forecast, our average oil input cost for Q1 is $99.

In our guidance, as discussed in the prior page, the average cost reflects this $99 for Q1 and $120 per barrel for each of Q2 to Q4. The price per barrel was around $115 this last Friday. It's come down in the last day or two, and it's been moving around significantly in recent weeks.

The situation in Ukraine will continue to impact this dynamic and we will keep you updated as events impact our results and thinking. Importantly, long-term we believe we have the opportunity to further reduce our reliance on diesel and take CapEx costs out by adding more renewable solutions and thus improving margins.

We are currently examining these possibilities as part of our development, the carbon reduction plan and look forward to updating on this later this year. This now brings us to the end of our formal presentation. We thank you for your time today, as well as your continued support for the business. Operator, please now open the line for questions..

Thank you. [Operator Instructions] Our first question is from Jonathan Atkin of RBC Capital Markets. Jonathan, go ahead..

Hi. This is Bora Lee on for Jon. Thank you for taking the questions. You note on Slide 22 that other key components of diesel in your cost structure includes the percentage mix at imports versus locally sourced diesel and which we buy it in the spot market or futures.

To do a bit of a deeper dive into what that sourcing that’s currently, and what are the factors that would impact the mix of imports versus local and spot versus futures purchases..

Hi, Bora. Steve here. So, a variety of different items go into that sourcing strategy. We don't sort of disclose minutiae detail around that, but we look at what is the price of the local market, what is the price of the import market.

What is the availability at the right times in terms of delivery for what we need, and how much of that availability can we afford purchase. And all of that sort of supply together with pricing combines to give us a constantly moving mix between whether we're sourcing locally or importing.

So, it's a complete balance, and it's dynamic, it keeps moving. That's sort of a key way we can control supply and price..

Thanks.

And can you also provide some color around what you're seeing in facing of losing activity in Nigeria and touch on deployment of spectrum following the auction?.

Yes, I mean, we've had another very significant year, and certainly H2 of last year 2021 coming from leasing activity in Nigeria, a lot of it coming through in lease amendments, as you've seen through Q3 and Q4 results.

The revenue guide we've given you is another 14%, headline growth, and a significant amount of that organic activity being driven out of Nigeria as well as we expect to see colocation some new site builds as well, but also lease amendment activity continue. Most of that lease and M&A activity still driving off 4G.

We -- as we said, we have now seen 5G spectrum allocated. And we have some what I would call de minimis orders for FY '22 on 5G rollouts. So great news for the industry. The carriers are just starting to think about how best to deploy that network. I don't think we're going to see a huge impact of it in 2022.

But certainly, we have some initial orders, and it'll be a 2023 onwards item, in our view..

Thanks. And if I could, sorry, just squeeze one last one in. The industry has seen TowerCos use sales of minority interest to financial sponsors and formation of JVs as alternative sources of funding growth. Just curious what your views are on these types of funding vehicles. Thank you..

I think as a business, we're always looking at the optimal way to finance ourselves, and also create shareholder value. We've utilized minority stakes and joint venture partnerships within certain opcos around the group. We have one of those in LatAm right now with TIM in the fiber business that we started.

Zain a very small element in Kuwait, and in South Africa, we're going to have minority partners in that particular acquisition when it closed as well. So, we've looked at it from a broader scale. I think that just depends on the value proposition. I think we like where the business positions, and we feel it's an incredibly well-placed business.

So, if something like that would come along, we'd consider it..

Thank you..

Our next question is from Phil Cusick of J.P. Morgan. Phil, go ahead..

Okay. Hi, thank you. Thanks for the detail on the oil impacts. Margins in '22 are much better than we would have thought given that which is great to see.

For that $7 million adjusted EBITDA impact for a $5 increase in oil prices, how is that split between Nigeria and the rest of the business?.

Nearly all of it is Nigeria, Phil. So, in terms of how people think about the oil environment around IHS stock, it is almost entirely not totally, but almost entirely a Nigeria facet.

If people remember that our MENA segment and our LatAm segment is effectively clear of energy, but given the power pass-through mechanisms that we have in place in those particular segments. And then our Sub-Saharan African business, there is some diesel in those -- in that particular segment, but there is also significant grid connectivity.

So really, we're talking about Nigeria when we're talking about oil. So that $7 million is almost all Nigeria..

Thank you. And then let's dig more into the repatriating cash from Nigeria. You gave a number for Naira as a portion of your cash balance. What was that a quarter ago? And can you dig more into sourcing dollars from banks and talking about hedging as well? Thanks..

Yes, so obviously the quarter-on-quarter cash balance in Nigeria is dependent on where we are in the collection cycle. So Q3 was a significantly higher balance, it's more like $200 million. I can get the exact number for you, but that was because of when we had collected from our customers.

As we went through the course of Q4, we then obviously deployed capital into the business and upstream some as well and hence the $81 million cash equivalent balance in Nigeria at the end of the year.

And that’s something that we spoke about before that we continue to look to do as we collect from customers, we will ultimately look to service the needs of the business and then with excess cash have to upstream that and get it offshore. In terms of what we’re doing, I don’t think the strategy has particularly changed through the last 3 months.

What I would say is we are continuing to push our banking relationships and our access to banks within Nigeria to see what different products we can access and that is with the aim of trying to target larger amounts rather than smaller slow and steady as sourcing.

So, it’s not an easy market, but there is tower availability and we are working hard to continue sourcing what we want further year of 2022.

Sorry, did I get all of your points?.

Thanks. Yes, that was good. And then one for Sam, if I can. Sam, what does the acquisition pipeline look like? And can you talk to us about, you talked about Asia in the past, and does your stock price impair your ability to acquire portfolios? Thanks, guys..

Hi, Phil. Look, the strategy remains what we’ve discussed. We want to diversify. We see ourselves as a global emerging market infrastructure company, that’s how we see ourselves. We will continue to look beyond where our market are. Now having said that, we recently made moves into large markets.

We made a move into Egypt, we made a move into South Africa. While we continue looking outside these markets, I would say the focus this year would be largely on these, like Brazil, of course. Now if something comes out that is so transformation and so strategic for us that is outside these markets, we will definitely consider.

The share price is definitely not helping. But again, I see that as just a point in time. Other alternative funding could be available if something needs to happen quickly. But to be honest, at the moment I think would largely focus on our existing markets, especially given the uncertainties around the globe and where things are, well Ukraine, Russia.

China yesterday now starting the massive lockdowns again, et cetera, et cetera. So that’s how we see 2022..

Thanks very much..

Thanks..

Our next question is from Greg Williams of Cowen. Greg, please go ahead..

Great. Thanks for taking my questions. Just on the guidance for revenue, what level of organic growth is factored in the other regions. You noted Nigeria has some strong leasing activity, but hoping you could provide some color on organic growth in the other regions? Second question is just on Egypt.

I realize it’s not in guidance, but what’s your expectations on the cadence of signing new carriers? It is a first half story or is it back half loaded? Thanks..

Hi, Greg. So, in terms of the guide, the revenue range we’ve given you is 14.2% total reported growth at the midpoint of the range. That is roughly split 15% organic, 4% inorganic given the acquisition activity we’ve seen and with a 5% FX headwind. So that gives you an idea of the organic element 15%.

And a big chunk of that’s coming through Nigeria and through LatAm where we are expecting more leasing activity, more build activity. We haven’t got into disclosing the exact breakdown of each building block of the growth components.

But what we have also said is from a new build site perspective, we expect 1,250 new sites in Nigeria, and we are forecasting around 700 new sites in LatAm, I think that was Brazil and at around 270 in Sub-Saharan Africa and approximately 110 in MENA. Those numbers are slightly around it. So that’s how we’re thinking about the business.

So obviously, Nigeria and LatAm are our key growth factors for the guide next year..

And Egypt?.

Yes, sorry, and then, Egypt -- yes, and then Egypt, look I think, work in progress, so can’t say much until we have something to say. There’s lots of conversations going on, lots of discussions with carriers, different projects we’re looking at in assessing.

So, as I’ve said on the last quarter, we will endeavor to keep you update quarter-on-quarter and as soon as we have something significant to report to you, we will let you know. Best guess, yes it would be second half before it starts impacting the business. But we will update you properly when we know more..

I mean, please remember that Egypt does not have a tower industry at the moment. I mean, we have the task of developing the business, but we also have the sort of developing that industry somehow, I mean it don’t exist at the moment. People are not used to the idea.

So, if we have to do that part plus the actual part of getting the business, but we are making some strong headwinds..

Got it. Thank you..

Thanks..

Our next question is from Michael Rollins of Citi. Michael, please go ahead..

Thanks and good morning. I’m curious if we could focus a little bit more on the Slide 11.

Can you remind us where churn in this bridge and what you saw from churn in the fourth quarter as well as for the full year 2021?.

Yes. So, churn was about 1,200 for the full year. But of that 1,283 to be precise for the full year. But of that, 826, well what we call non-key customers.

So outside of our important customers and that was really a cleanup exercise in terms of those customers that we were not looking revenue for and so we cleaned them up at the year-end and took them out of the tenant count. So, consider that 1,283 churn, 75% of that does not go to revenue.

Another chunk of that churn was what we’ve disclosed previously around the 9 mobile piece. So, 269 of those was 9 mobile, which was part of our agreement earlier in 2021 to rationalize that business that we talked with you previously. So actually in terms of true genuine churn, very, very small through the course of the year..

And so where does that fit in these boxes on Slide 11? Which bucket is it in?.

So, it would come through either new sites or new colocation depending on what it is, that’s coming off, whether it’s a colo [ph] or anchor tenant. But as I said, three quarters of that was not showing a revenue impact anyway, so it would not be picked up in a revenue bridge because there wasn’t revenue associated with it..

And you just in a previous question gave us a sense of what the total organic growth for '22. Can you break that out a little bit more into what the expectation should be for escalation, amendments and colocation? Just a sense of the drivers of internal organic growth for the business..

Yes, as I said on the previous comment, we haven’t broken that out in terms of the guidance.

And what I would say to help people think through, it is, we think that is going to be pretty similar to what we’ve seen in FY '21, lease amendments will continue to lead the way and new sites and colocation will probably be similar type percentage contributions to what you see on Slide 11 of the presentation, and so reasonably similar.

Organic growth as I mentioned to about 4%, so that’s a little bit higher given the acquisitions that we brought into the business during 2021. But from a kind of percentage contribution split, it will be not dissimilar to Slide 11..

And in the markets that you’re operating in and acquiring, should we be mindful of any carrier customer consolidation that might impact your future revenues from those regions?.

No, not at this point, Mike. I think our markets are reasonably stable from a carrier consolidation perspective and the one that obviously jumps out is Brazil in terms of Oi [ph] Mobile, but we have de minimis next zero Oi Mobile exposure. So that one won’t impact us..

Thanks..

Thank you, Mike..

Our next question is from Simon Coles from Barclays. Simon, go ahead..

Hi, guys. Thanks for taking the questions and the extra detail in the presentation this quarter. And first one is just on CapEx. So, you said that you obviously had some supply chain issues.

Should we think of the guidance that 2022 is of more normalized level? And how should we think about the mix versus the mix you provided on Slide 15?.

Hi, Simon.

So, I think you’ve seen this at a slightly wider range around CapEx in the guide and that’s on purpose given the items you mentioned around supply chain issue, the Russia, Ukraine pace, just at the point where supply chain was starting to free up again and we obviously as the world were hit with the Russia, Ukraine situation, so hence the slightly wider range on guide.

We will keep you guys updated through the course. We’ve already factored in pricing increases, which we’ve seen around the business, which hasn’t been significantly material, but enough to factor in. So that’s already baked in that range and we will keep you guys updated as we go through. In terms of the mix. Again, we haven’t really broken it down.

Anything I would say is, people often ask us from maintenance CapEx or the non-discretionary element, that’s going to be roughly 20% higher we think than FY 2021, reflective of the slightly larger business around new builds across different African portfolio, LatAm, but also obviously the introduction of full year of the fiber business as well.

So, we think maintenance CapEx about 20% roughly, higher than the 2021 and then the rest is split between new builds and fiber, et cetera..

That’s great. Thank you. And just on that withholding tax comment you made in Nigeria and what that means for the recurring levered free cash flow. Could you just elaborate a bit more on that just to make it clear? Thank you..

Yes, I think we just want to make -- I mean, Simon, as we’ve been talking about since before, we left, but just wanted to continue making it clear to people that as we grow in Nigeria, we typically don’t suffer corporate income tax which is at about 30% in Nigeria.

We suffered withholding tax on revenue, which offsets any corporate income tax that we have given it’s a higher level. So, we saw for 10% withholding tax on revenue in Nigeria and then obviously as we are growing and adding more revenue that tax is coming at source rather than further down the income statement where you get operational leverage.

So, because we show our RLFCF inclusive of cash tax paid, you see that withholding tax line running through the RLFCF to give you a true cash metrics. So, as we’re growing, we suffer that tax as source, you will see the impact come through in the RLFCF..

That’s very clear. Thanks very much..

Thanks, Simon..

Our final question is from Brett Feldman from Goldman Sachs. Brett, go ahead..

Hi. Yes, thanks for taking the question and congratulations to Adam and Steve and Colby and some exciting career transitions for all of you. I wanted to follow-up a little bit around power. So, on Slide 22 you highlighted that 42% of your sites in your African markets had hybrid power solutions.

And I was wondering where could that go? Could the substantial majority of your sites potentially take advantage of hybrid or maybe what percentage of your sites would you think of as being suitable and what makes them suitable? So, it’s really a question as what is your opportunity over time to maybe meaningfully augment the profile of your power costs? And I’m curious what you’re planning on doing this year in terms of capital investment around hybrid solutions? And then, you also on the same slide pointed out that it basically looks like last year about a third of your diesel costs were pass-through to your tenants under the leases.

And I’m wondering has it worked out [technical difficulty] or is it just that’s the way it worked out last year?.

Hey, Brett, this is Sam. Maybe I can take the first one. And then can I like to hand over to Steve on the next part. Look, people need to remember that Nigeria has a power problem. Nigeria, given its scale and size, geography and population is a massive country, but does not have electricity basically.

We see ourselves as kind of like the sources of this problem. That’s why it’s like a very, very complex situation there. 5 years ago, we did a major investment in to kind of shifting away from diesel into solar, into battery and kind of like resulted in around 40%, 50% reduction in our OpEx spend.

This time around seems to be like this is something that we need to do. We started late last year immediately after the IPO a drive into kind of like what can be done again. We definitely intend to go deeper into investing into renewable. We want to solve this problem more, I would say, by replicating diesel.

This is now that I think to do whether on a conscience basis and of course on a numbers basis. So do expect indeed from us an announcement to that effect this year, Brett. It's definitely something we want to do. Now having said that, Brett, I also want to highlight something. The guidance has oil at $120, still our margins remain over 50%.

I mean, that’s a message of resilient, that’s how resilient this business. And then having said that, we will definitely invest further and hopefully drive diesel at some point completely out of the business..

And then, Brett, on your comment around the pass-through. So, I think we are doing, as you’ve taken 5% of revenue and dividing that into our total cost of power, so I guess you do just done, it's about 29% that could be pass-through and which is correct.

Just keep in mind where we do see diesel volatility is particularly in Nigeria, where we have certain elements of those pass-through revenues yet, but some of it is in LatAm, for example, which and doesn’t have any volatility in it anyway. So, yes, you’re correct, it’s about 29% gets pass-through to customers on FY '21 numbers..

And that’s essentially what you are assuming in your guidance for this year or something in that range?.

Yes, correct. It carries forward because those are all long-term contracts..

Great. Thank you for taking the questions..

Thanks, Brett..

Great. Well, this concludes our call. Thank you ….

That brings us to the end..

Thank you very much and we will talk to you later. Thank you..