Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q3 2022 Earnings Presentation
32 slides from Millicom International Cellular's earnings presentation, Oct 27, 2022
Slide 1: Staying the course
Staying the course Third Quarter 2022 Mauricio Ramos, CEO Sheldon Bruha, CFO October 27th, 2022 Millicom International Cellular S.A.
Slide 2: Safe Harbor
Safe Harbor Cautionary Language Concerning Forward-Looking Statements Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations and intentions, projected financial results, liquidity, growth and prosp
Slide 3: Non-IFRS measures
Non-IFRS measures This presentation contains financial measures not prepared in accordance with IFRS. These measures are referred to as “non-IFRS” measures and include: non-IFRS service revenue, non-IFRS EBITDA, and non-IFRS Capex, among others defined below. Annual growth rates for these non-IFRS m
Slide 4: Q3 2022 Highlights
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Slide 5: Financial highlights
Financial highlights 2.7% Q3 22 Service revenue Organic growth2 4.5% Q3 22 OCF Organic growth1,2 Excluding one-off 1) Adjusted for early termination of software contract. 2) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Please refer to the non-IF
Slide 6: Growth shifting amidst softer macro
Growth shifting amidst softer macro Service Rev. 2021 2022 Ambition YTD Growth1 Economy High inflation Macro accelerating Slowing economy Mobile Post-COVID Resumed Prepaid surge Postpaid migration 3.6% Low single-digit Home Work from home Return to office Homeschooling Back to school 2.9% High singl
Slide 7: Mobile migration to postpaid continues
Mobile migration to postpaid continues Postpaid base growing rapidly... …driving service revenue Group postpaid customers (m) 8.9% Postpaid customers as % of total 6.2 5.3 Postpaid mobile Service revenue organic growth1 35% Postpaid mobile Q3 21 Q3 22 As a % of mobile service revenue 14% 15% 1) Grou
Slide 8: Continuing to invest in Home
Continuing to invest in Home Build ramping up Stable net adds Catalysts Group HFC / FTTH Homes passed net additions (‘000) Group HFC / FTTH Customer Relationship Net Additions (‘000) Short-term: • Pricing discipline 254 85 • World Cup 74 • Vix+ La Liga 214 59 Long-term: 153 155 • Low country penetra
Slide 9: Positioning Tigo as home for soccer in the region
Positioning Tigo as home for soccer in the region International events Local Leagues Community outreach 9
Slide 10: B2B continues to perform strongly
B2B continues to perform strongly Our Strategy Sustained growth Driven by digital B2B Organic Service Revenue Growth1 Group Digital B2B Organic Service Revenue growth1 5 Digital as % of B2B service revenue 1 5.7% 5.9% 35% Mission Become the most 4.9% trusted ally for businesses in their digital jour
Slide 11: Spotlight on largest markets
Spotlight on largest markets Guatemala Colombia Panama Sustaining leadership Continued mobile strength Consolidating market -0.5% -2.6% 5.7% 6.6% 3.9% 6.0% Service revenue1 EBITDA1 Service revenue1 EBITDA1 Service revenue1 EBITDA1 • Gained significant mobile • Mobile up 14%1 • Mobile up 9%1 market s
Slide 12: Strong investment continues
Strong investment continues 5G +623k ~17% Launched Homes passed YTD In Guatemala HFC/FTTH Net Additions 79% +1,500 FY 22 Capex to sales 4G Coverage Points of Presence Net Additions YTD 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Please refer
Slide 13: TowerCo and TigoMoney advancing
TowerCo And TigoMoney advancing TowerCo TigoMoney TigoMoney Perimeter App launched Scope 2.0 determined in Honduras and Bolivia Branding Nano-lending Lending Brand chosen pilot ongoing Merchants Finalizing Large new MLAs MLA drafts merchants online 13 13
Slide 14: Culture and ESG Recognitions
Culture and ESG Recognitions Rank Company 1 DHL Express 2 Hilton B 3 Cisco 4 Salesforce 5 Millicom | Tigo 14
Slide 15: Q3 2022 Financial Review
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Slide 16: Macroeconomic backdrop challenging
Macroeconomic backdrop challenging Inflation has increased GDP growth slowing Average CPI YoY Inflation in Tigo Markets (%) Average GDP growth for Tigo countries Source: Bloomberg Source: IMF October 2022 World Economic Outlook 9.5% 8.1% 6.0% 4.0% 2.8% 3.1% 3.2% 2.7% 1.7% 2019 2020 2021 2022 2023 4.
Slide 17: Group Service Revenue
Group Service Revenue 1 YoY Organic Service Revenue1 Growth Q3 21 – Q3 22 +2.7% 1,280 2.7% Organic Service 951 Revenue1 Growth Q3 21 M&A, FX Rebased Mobile Fixed Q3 22 and Others Q3 21 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Please refer
Slide 18: Q3 2022 Service Revenue by Country
Q3 2022 Service Revenue by Country Service revenue ($m), and YoY local currency growth2 1 Guatemala (26% of Group) Colombia (24% of Group) Bolivia (12% of Group) Panama (12% of Group) -0.5% +5.7% -0.6% +3.9% 340 303 152 158 Q3 21 Q3 22 Q3 21 Q3 22 Q3 21 Q3 22 Q3 21 Q3 22 Paraguay (10% of Group) El S
Slide 19: Group EBITDA
Group EBITDA 1 YoY Organic EBITDA1 Growth -0.6% Q3 21 – Q3 22 Key Drivers Organic EBITDA1 Growth A Energy Excluding one-off -0.6% Employee costs -1.9% 539 546 Commissions A B 352 TigoMoney and TowerCo investment • B Early termination of Q3 21 M&A, FX Rebased Revenue Direct Net Opex Q3 22 One-off Q3
Slide 20: Margins broadly stable despite macro
Margins broadly stable despite macro Group EBITDA1 Margin (%) 40.3% 40.0% 39.9% 39.0% 39.4%2 Inflation impacts • Energy • Employee costs Additional investments • Tigo Money and TowerCo Carve-outs Pricing actions in Q3 • Home – across our footprint • Postpaid – in 4 markets • Prepaid – in 2 markets P
Slide 21: Q3 2022 EBITDA by Country
Q3 2022 EBITDA by Country 1 EBITDA2 ($m), and YoY local currency growth2 Guatemala (36% of Group) Colombia (17% of Group) Panama (13% of Group) Paraguay (11% of Group) +6.6% +6.0% -2.6% -2.7% 208 97 75 62 Q3 21 Q3 22 Q3 21 Q3 22 Q3 21 Q3 22 Q3 21 Q3 22 53.6% 52.1% 29.8% 30.4% 44.7% 45.2% 45.6% 43.7%
Slide 22: Group OCF
Group OCF 1 YoY Organic OCF1 Growth Q3 21 – Q3 22 4.5% +4.5% • A Capex phasing Organic OCF1 Growth Excluding one-off +2.0% 286 294 B• Early termination of B software contract A 122 Q3 21 M&A, FX Rebased EBITDA Capex Q3 22 One-off Q3 22 & Others Q3 21 Ex One-off 20.6% 21.2% OCF1 Margin 1) Adjusted fo
Slide 23: Net financial obligations and leverage reducing
Net financial obligations and leverage reducing Group financial obligations1 ($m) -833 1,025 7,006 6,814 35 717 263 290 178 5,981 Net debt1 EFCF Rights Offering Africa Exit Panama FX & Others Net debt1 Leases Net financial 31-Dec-21 After Africa Minority 30-Sep-22 obligations1 30-Sep-22 Net debt to
Slide 24: Well balanced debt profile
Well balanced debt profile Q3 22 Average maturity 5.9 Years Average cost of debt 6.0% Fixed or Swapped 82% Cable 31s Comcel Telecel 29s Onda $808m $900m $550m 28s $675m $600m 4.500% 5.125% 5.875% $450m 6.250% 4.500% 5.125% 26s SEK 2bn $148m 4.913%1 6.625% 1) Fully swapped rate 24 2) Fully swapped cu
Slide 25: Outlook
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Slide 26: OCF on target for ~10% OCF growth in 2022
OCF on target for ~10% OCF growth in 2022 1 Capex phasing is different in 2022 ($m) 1,040 ~1,000 699 655 385 ~300 9M Q4 Full Year ~17% 2021 2022 Forecast Capex/sales 2022 1) Capex has been adjusted to exclude Africa. Group financial information does not include Honduras, which is not consolidated. N
Slide 27: 2022 EFCF outlook
2022 EFCF outlook 2022 EFCF Quarterly EFCF1 excluding Africa ($m) 150-200 26 1 -63 Q1 22 Q2 22 Q3 22 Q4 22 2022 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Please refer to the non-IFRS disclosures in this presentation for a description of no
Slide 28: Appendix
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Slide 29: Group Financial Highlights – Q3 2022
Group Financial Highlights – Q3 2022 Group Consolidated Financial Statements1 Selected P&L data Key Observations $ million Q3 22 Q3 21 % Var Revenue 1,388 1,006 37.9% A •A Consolidation of Guatemala operations Cost of sales (369) (288) (28.2)% Operating expenses (479) (367) (30.7)% •B Exit from Ghan
Slide 30: Capital Structure
Capital Structure Financial obligation profile As of September 30, 2022 Latam HQ 68% 32% Bonds Banks Leases 64% 23% 13% Fixed or Swapped Variable 82% 18% Local Other 40% 60% Less than 5Y 5Y or more 28% 72% 30 30 *Excluding Leases. El Salvador's official unit of currency is the U.S. dollar, while Pan
Slide 31: Financial obligations by country
Financial obligations by country 1 Honduras Guatemala: (not consolidated): Gross: $1,677m Gross: $430m Net: $1,538m Net: $343m Nicaragua: Leverage: 1.80x Leverage: 1.35x Gross: $276m Group: Net: $255m Gross: $7,890m El Salvador: Leverage: 2.36x Gross: $290m Net: $7,006m Net: $273m Of which Leases: L
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