Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Investor Presentation
19 slides from Millicom International Cellular's investor presentation
Slide 1: Long term macro-economics assessment of Latin America
Long term macro- economics assessment of Latin America Sarah Hunter Oxford Economics
Slide 2: Methodology
Methodology Macroeconomic analysis was completed in three stages, with each stage leveraging quantitative tools built by the Oxford Economics team •Oxford Economics’ Global Economic forecasts Economic Model •Econometric analysis to decompose population into Macro Household projections income groups
Slide 3: Market Influencers
Market Influencers Growth has slowed in most Latam countries as the region has been buffeted by weak commodity prices, with many countries having limited scope for policy response External Factors Domestic factors Current Workers Government Exports Commodities Interest rate Population account remitt
Slide 4: Macro Outlook
Macro Outlook Bolivia and Honduras have the most favorable medium-term growth outlooks, whereas El Salvador has weaker underlying fundamentals that limits growth Macroeconomic Outlook Domestic and institutional factors are more important in determining outlook for investment and productivity, whic
Slide 5: Outlook for Households
Outlook for Households Costa Rica, Colombia, El Salvador, Guatemala, and Paraguay are all expected to have average incomes approaching or above US$20,000 by 2026 Consumer spending The outlook for average incomes is largely determined by overall economic growth and therefore we expect to see the st
Slide 6: Exchange Rate
Exchange Rate We expect to see a gradual depreciation in the currencies of Bolivia, Colombia, Costa Rica, Guatemala, Honduras, and Paraguay against the US$ Exchange rate Exchange Rate Depreciation Depreciation Volatility can be managed with some form of 2015 2021 (CAGR 2015-21) 2026 (CAGR 2021-26)
Slide 7: Latam Market Potential
Latam Market Potential Honduras and Bolivia offer strong growth potential, while Colombia and Guatemala are the largest markets GDP growth (%) 2011-16 2016-21 2021-26 Bolivia 4.9 4.4 5.0 Colombia 3.8 3.6 3.5 Costa Rica 3.8 4.0 3.4 El Salvador 2.0 2.1 2.1 Guatemala 3.6 3.5 3.4 Honduras 3.4 4.0 4.6 Pa
Slide 8: Bolivia Macro Outlook
Bolivia Macro Outlook Bolivia has been hit by the slump in commodity prices but the economy should benefit from the recovery in oil and gas prices. While growth should outperform Latam as whole, income levels are relatively low Market Outlook Risk Page 8
Slide 9: Colombia Macro Outlook
Colombia Macro Outlook The largest and second highest income market out of Millicom’s countries, but FX hit by commodity prices and policy backdrop to remain tight. The situation with FARC and ELN has improved but remains a risk Market Outlook Risk Page 9
Slide 10: Costa Rica Macro Outlook
Costa Rica Macro Outlook Most developed country economically and insitutitionally in Millicom’s markets, offering a lower risk environment. Budget déficit is a concern and could be a drag on the economy Market Outlook Risk Page 10
Slide 11: El Salvador Macro Outlook
El Salvador Macro Outlook Security threat and criminality clouds the outlook and the weak political backdrop means progress to creating a more business-friendly environment is likely to be slow Market Outlook Risk Page 11
Slide 12: Guatemala Macro Outlook
Guatemala Macro Outlook Dependent on the US, especially for remittances, which should help growth over the next couple of years, while rapid population growth should help medium term prospects. Security remains a risk to business, however Market Outlook Risk Page 12
Slide 13: Honduras Macro Outlook
Honduras Macro Outlook Growth set to accelerate, underpinned by recovery in US and solid fundamentals. Progress on reforms to promote the business environment are needed Market Outlook Risk Page 13
Slide 14: Paraguay Macro Outlook
Paraguay Macro Outlook Growth and FX have been volatile due to its dependence on soya bean exports. Growth expected to exceed the rest of Latam but the catch-up in income levels is expected to be slow Market Outlook Risk Page 14
Slide 15: Market Attractiveness
Market Attractiveness Costa Rica is least risky but biggest returns could be in Bolivia and Honduras Market attractiveness Bolivia Colombia Costa Rica El Salvador Guatemala Honduras Paraguay Economic Growth 1 4 3 7 5 2 6 Exchange Rate 2 3 7 1 5 4 6 Business environment 3 4 1 4 4 4 2 Security 1 4 1 7
Slide 16: Appendix
= Appendix We believe in better. We believe in tico
Slide 17: GDP growth
GDP growth South America GDP growth Central America GDP growth % y/y % y/y 16 Forecast Bolivia 6 Forecast Costa Rica El Salvador Colombia Guatemala Honduras 14 Paraguay 5 12 10 4 8 3 6 4 2 2 1 0 -2 0 2010 2012 2014 2016 2018 2020 2022 2024 2026 2010 2012 2014 2016 2018 2020 2022 2024 2026 Source: Ox
Slide 18: Households and household income
Households and household income Total households (millions) 2010 2011 2012 2013 2014 2015 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2.6 2.6 2.7 2.8 2.8 2.9 3.0 3.0 3.1 3.2 3.3 3.3 3.4 3.5 3.6 3.7 3.7 Bolivia 12.2 12.5 12.7 13.0 13.3 13.6 13.9 14.2 14.4 14.7 15.0 15.3 15.5 15.
Slide 19: Exchange rates
Exchange rates Exchange rates (vs. US $) 2010 2011 2012 2013 2014 2015 2016e 2017e 2018e 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 7.02 6.94 6.91 6.91 6.91 6.91 6.91 6.91 7.01 7.08 7.15 7.21 7.26 7.32 7.37 7.52 7.66 Bolivia Bolivianos 1,899 1,848 1,797 1,869 2,002 2,742 3,300 3,200 3,100 3,000
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