Millicom International Cellular S.A. · NASDAQ:TIGO
Millicom International Cellular — Millicom — Investor Day (2013)
36 slides from Millicom International Cellular's investor day presentation, 2013
Slide 1: Millicom
Millicom Hans-Holger Albrecht, President & CEO
Slide 2: A diversifying Digital Lifestyle leader in Internet, Media and Mobile Financing
A diversifying Digital Lifestyle leader in Internet, Media and Mobile Financing
Slide 3: Millicom: Long standing track record in execution
Millicom: Long standing track record in execution Revenues EBITDA This is Millicom $bn $bn 273m population coverage with 47m mobile +35% +36% 2.1 customers 4.8 3.6 1.5 #1 or #2 market position in 12 out of 13 countries in Latin America & Africa Leading Cable and Broadband companies in 5 countr
Slide 4: Market changes challenge our growth prospects so we have to accelerate our transformation
Market changes challenge our growth prospects so we have to accelerate our transformation Trends Voice ARPU erosion Little voice market penetration gain left Expensive handset subsidies on post-paid data/smartphones Consumer demand for digital services (music, video, apps)
Slide 5: Huge, immediate opportunities for growth in our markets
Good news is that we have huge, immediate opportunities for growth in our markets Exploding demand for mobile internet Exploding demand for mobile payments Mobile BB subscribers MFS subscribers m m 70 47 +97% +307% 24 17 2012 2015 2012 2015 Strong demand growth for Pay TV Strong macro environment Pa
Slide 6: The Tigo brand
The Tigo brand Elevate Tigo from a telecommunications to a digital lifestyle brand by becoming an integral part of our consumers’ lives in a complete, helpful and delightful way Source: Millicom
Slide 7: Increasing our focus on consumer demand for a digital lifestyle
Increasing our focus on consumer demand for a digital lifestyle Old world Telco New world: Digital Lifestyle company Smartphone Feature phone Tablet & PC Fixed & mobile internet Connected Content & TV Entertainment Digital commerce & services Increased stickiness Higher share of wallet Millico
Slide 8: This is an evolution not a revolution
This is an evolution not a revolution Revenue contribution by category Revenue contribution by category %, 2008 %, 2012 Entertainment Cable MFS 3% 1% Solutions 1% 3% Cable Information 8% 1% Entertainment 5% Information 11% Communication 72% Communication 95% Millicom's DNA is an enabler of Digital L
Slide 9: Our mid-term strategy will rest on 5 pillars
Our mid-term strategy will rest on 5 pillars 2012 2017 $4,8bn $9bn Mobile Cable MFS Commerce Cost & & Services Capex From Volume Building a Creating a $2bn Optimization to Value Blockbuster Investing in Business Growth Maximizing Investing in efficiency Leveraging high growth Relentless Building a T
Slide 10: Mobile
Mobile We believe in better. We believe in ticd
Slide 11: 4 key drivers for the mobile business going forward
There are 4 key drivers for the mobile business going forward 1 Population, urbanization and GDP per capita are growing in every region Macroeconomic and Both the addressable market and services penetration are expected to Demographic Growth expand 2 Data monetization is the key to future succ
Slide 12: Macro economic and Demographic Growth
Macro economic and Demographic Growth Population development GDP per capita development m, Millicom mobile footprint, 2012-2017 Indexed to 100, Millicom mobile footprint, 2012- 2017 + 4-5pp increases in urbanization Africa 203 179 Africa CAM SAM 64 69 SAM 29 32 CAM 1.0 2012 2013 2014 2015 2016 2017
Slide 13: Shift from Voice to Data
Shift from Voice to Data Traffic growth (x factor) Mobile revenue growth (year on year) 130 5 Mobile Revenue Traffic Digital 120 119 4 110 3 100 100 95 90 Mobile 2 Voice 80 Q1 10=1 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 70 10 10 10 10 11 11 11 11 12 12 12 12 13 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Acce
Slide 14: Changing customer behavior
Changing customer behavior Audio streaming traffic as % of total traffic 1.2% Video streaming traffic as % of total traffic 1.0% 0.8% 80% 1/3 of total data 0.6% traffic +/- 0.4% 30% 0.2% 0.0% 25% Q2 2012 Q4 2012 50% 20% App download traffic as % of total traffic 2.5% 15% 2.0% 10% 1.5% 228% 1.0% 5% 0
Slide 15: Evolution of our Business Model
Evolution of our Business Model Evolving mass market shopping experience Serving the rising middle class Smartphone fairs 2 3 Mobile smartphone showcase 1 From mobile top-up to… Rising Middle class 1 Pre-paid service bundles Below $60 quality smartphones are available 2 Electronic mobile top u
Slide 16: Cable & Digital Media
We believe in better. We believe in ticd
Slide 17: Further development of our cable business can be a major driver of growth
Further development of our cable business can be a major driver of Millicom’s growth Strong growth of cable businesses, driven by both the uptake of i) Pay TV and ii) fixed broadband access High-growth markets Under-served markets with only low quality/high price fixed line telco offers Highly
Slide 18: Existing cable business is already delivering strong growth
And our existing cable business is already delivering strong growth Revenue and EBITDA development1 m$, 2010-2012 231 166 185 Cable home revenue has grown at Revenue 18% CAGR over the last three years EBITDA Growth is driven by the expansion of 2010 2011 2012 the customer base Customer and ARPU
Slide 19: Cross selling and churn reduction opportunity between cable and mobile
Cross selling and churn reduction opportunity between cable and mobile 1. Cross-selling opportunity between mobile & 2. Churn reduction opportunity cable from multiplay Addressable Potential gains Churn levels of different product market for MIC bundles Sell mobile % annualized churn 1.2m to cable 6
Slide 20: Pay TV and broadband access provide strong growth opportunities
Cable & Digital Media- Pay TV and broadband access provide strong growth opportunities Pay TV market potential Fixed broadband market potential % of HH with Pay TV subscription, 2012 % of HH with broadband subscription, 2012 62% 47% Target range Target range 43% 44% 49% 44% 30% 29% 30% 21% 21% 17% M
Slide 21: Mobile Financial Services
Mobile Financial Services We believe in better. We believe in ticd
Slide 22: Key messages: MFS
Key messages 1 MFS is a huge opportunity for us In Millicom markets, 80% of the population is unbanked MFS penetration is 8% of Millicom mobile customers’ base at YE2012 2 We are on track to building a blockbuster MFS is already a huge success in Tanzania and further success stories are emergi
Slide 23: The MFS market is growing strongly, especially in Africa
The MFS market is growing strongly, especially in Africa Global MFS users1 m, 2011-2016 CAGR 550 23% MFS market is in a very early stage of 448 development – especially in Africa the 393 market is expected to grow 320 261 exponentially 212 161 Key growth drivers Focus of mobile operators and o
Slide 24: Mobile Financial Services - To bank the unbanked
Mobile Financial Services - To bank the unbanked MFS market size Millicom countries bn$, at market maturity Money transfer Self top up International remittances Online 30% payments Market- share Utility bills Saving accounts Merchant Microcredit payments Millicom MFS revenue potential in 2017: $600-
Slide 25: Online
Online We believe in better. We believe in ticd
Slide 26: Our Online business will reach over $1bn in revenues
Our Online business will reach over $1bn in revenues Launched businesses Latam Africa Source: Company information, Millicom, Solon
Slide 27: eCommerce in Latin America and Africa could be worth over $50bn
eCommerce in Latin America and Africa could be worth over $50bn if they develop similarly to the US eCommerce market development in the US 10 years ago… bn$1, 2002-2007 123 From US and European examples we know: 102 The market segments and business 82 67 models that work best and are most 53 42
Slide 28: E-Commerce will be an enormous opportunity in all our markets
E-Commerce will be an enormous opportunity in all our markets Core beliefs In mature markets currently mainly via PC Everyone will buy In emerging and mature markets development will happen soon, online and mainly via smartphone and other mobile devices From craigslist, free online classifieds
Slide 29: JV with Rocket Internet: e-commerce, marketplaces, lead generation
The biggest opportunities in our JV with Rocket Internet are e-commerce, marketplaces, and lead generation The opportunity Underserved and rapidly developing markets Everyone will buy Fragmented market landscape, no dominant players yet E-Commerce Rocket Internet is a proven expert in launchin
Slide 30: Two Rocket Internet ventures show how we grow new businesses
Two Rocket Internet ventures show how successful we are at growing new businesses KANUI Jumia Outdoor and sports retailer Fashion and merchandise Founded in 2011 retailer – Zalando and Already #1 online outdoor sports Amazon model retailer in Brazil Founded in 2012 Boost from football Wo
Slide 31: Significant synergy potential among Millicom's pillars
Significant synergy potential among Millicom’s pillars Synergy potential among Millicom’s pillars Leveragable assets & capabilities Brand, customer base, distribution network, 1 Mobile CRM, billing, backhaul, content 1 2 2 Brand, customer base, distribution network, CRM, billing, mobile network Cabl
Slide 32: Ambition level 2017 - excluding Online
Ambition level 2017- excluding Online Achievement 2012 Ambition 2017 Revenue 8pp growth > $9bn Share of non ~ 30% Over 50% voice/digital 40% after Corporate Stabilize above 35% EBITDA margin Costs after Corporate Costs Below 15% from Capex/revenues 19% 2016 and onwards ROIC 24.7%
Slide 33: How we do it: basic principles behind realizing our growth ambitions
How we do it: The basic principles behind realizing our growth ambitions Guiding Principles Provide a clear long-term vision and strategy Set long term financial and non-financial goals Strategy Set and define investment priorities Structure follows strategy: Business unit organization Organ
Slide 34: This is Millicom
This is Millicom 1 Millicom is evolving from a mobile voice company into a digital lifestyle leader dedicated to emerging markets 2 Millicom has the ambition to double revenues over 5 five years to $9 billion, with an EBITDA margin around 35% 3 Millicom strategy rests on five pillars: mobile, cable
Slide 35: Thank You!
We believe in better. We believe in ticd
Slide 36: Questions & Answers
We believe in better. We believe in ticd