Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q1 2012 Earnings Presentation
41 slides from Millicom International Cellular's earnings presentation, Apr 18, 2012
Slide 1: Financial results Q1 2012
Millicom International Cellular S.A. Financial results Q1 2012 18th April, 2012 Mikael Grahne François –Xavier Roger
Slide 2: Disclaimer
Disclaimer This presentation may contain certain “forward-looking statements” with respect to Millicom’s expectations and plans, strategy, management’s objectives, future performance, costs, revenues, earnings and other trend information. It is important to note that Millicom’s actual results in the
Slide 3: Q1 Highlights
Q1 Highlights • Revenue growth in local currency of 8.4% • Focus on new categories is yielding strong results: over 80% of growth is derived from products and services that did not exist three years ago • Sustained high single digit growth from Latin America but slow- down of growth in Africa due to
Slide 4: Financial Highlights Q1 YoY
Financial Highlights Q1 YoY US$ million Q1 12 Q1 11 $ Local growth currency Mobile customers (million) 43.8 39.8 10.1% Mobile ARPU (US$) 9.0 9.3 -2.8% -2.6% Revenues 1,168 1,081 8.0% 8.4% EBITDA 517 509 1.4% 2.2% % of revenues 44.2% 47.1% -2.9 pt Capex* 172 85 101.5% % of revenues 14.7% 7.9% 6.8 pt
Slide 5: Average revenue growth
Average revenue growth Revenue growth YoY - local currency 13.0% 12.7% 11.85% 12.0% Avg 2010: +11.3% +11.0% 10.74% Avg 2011: 11.0% +10.5% 10.1% 10.0% 9.83% 10.53% 9.97% Avg 2009: 9.0% +8.8% 9.10% 8.65% 8.3% 8.0% 8.39% 8.23% 7.0% Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Slide 6: ARPU evolution
ARPU* evolution US$ Q1 12 YoY** Q4 11 Q3 11 Q2 11 Q1 11 Central America 11.6 -4.8% 12.0 11.8 11.9 12.1 South America 13.1 +3.7% 13.4 13.5 13.2 12.3 Latin America 12.3 -0.4% 12.7 12.7 12.5 12.2 Africa 4.6 -6.8% 4.8 4.9 5.1 5.2 Total Millicom 9.0 -2.6% 9.3 9.3 9.4 9.3 Stable ARPU in Latin America Decl
Slide 7: Category review
Category review
Slide 8: Revenues by category-MIC
Revenues by category-MIC Local Contribution US$m Q1 12 Q1 11 currency to recurr. rev.* growth growth Q1 12 Communication (voice, SMS) 827 818 1.9% 12% Voice 723 721 1.1% 3% SMS 104 97 7.8% 10% Information (Data services) 150 106 38.8% 56% of which Mobile Data 110 72 51.0% 49% 100% Entertainment (TV,
Slide 9: 88% of recurring revenue growth from new categories
88% of recurring revenue growth from new categories Recurring revenues growth (US$M) 140 120 Information, Entertainment, Solutions, MFS 100 67 Communication 80 66 70 60 61 40 68 60 50 20 42 31 10 0 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Innovation in products & services delivering growth 9 Communication resi
Slide 10: VAS contributing >30% of revenues
VAS contributing >30% of revenues + 4.7 pts Q1 12 35.1% 35.0% 30.3% 30.0% 28.4% 28.5% 27.1% 25.6% 25.0% VAS as a % of revenues 20.0% 14.0% 15.0% 10.0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 LATAM Africa of which SMS VAS is: 10.0% 9.8% 10.0% 10.0% 10.1% 11.6% 4.7% Over 30% of revenues coming from non voice se
Slide 11: Strong growth of mobile data revenue in Latin America
Strong growth of mobile data revenue in Latin America Data revenue (2G+3G) - Latin America 120 Q1 2012: +50% YoY growth 100 80 US$ m 60 40 20 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Commercial investment in mobile data shows good results 42% of LATAM’s recurri
Slide 12: Commercial investment to accelerate growth of data services
Commercial investment to accelerate growth of data services 300 +10.1% 255 250 232 +17.4% 85 200 72 Subsidies cost US$m 150 Sales & Marketing costs (excl. subsidies) +6.8% 100 160 171 50 0 Q1 11 Q1 12 Subsidies increasing at twice the rate of revenues to seize growth opportunities 12
Slide 13: Good growth in data revenue in Latin America
Good growth in data revenue in Latin America Latin America (2G+3G) Q1 2012 Q4 2011 QoQ growth Total data users* 2G+3G (million) 3.8 3.5 9% % of total cus tomers 14.2% 13.5% 0.8 pt Total Data Revenue 2G+3G 104.0 93.0 12% of which: Handsets (US$M) 59.9 50.5 19% Datacards (US$M) 44.1 42.5 4% Data reven
Slide 14: Product penetration
Product penetration Highest Lowest Total MIC Q1 12 Q1 11 Change market* market* (pts) Q1 12 Q1 12 SMS 54.0% 51.7% 2.4 80.1% 18.9% (com m unication) Ring Back Tone 25.6% 27.5% -1.9 37.9% 6.3% (entertainm ent) Data (2G+3G) 10.7% 8.0% +2.7 21.7% 0.2% (inform ation) Tigo Lends You 37.6% 34.2% +3.4 55.3%
Slide 15: Tigo Cash gaining momentum
Tigo Cash gaining momentum Tigo Cash penetration % (as a % of mobile customers) 25.0% 20.0% Paraguay * Tanzania 15.0% Rwanda 10.0% 5.0% 0.0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2010 2010 2011 2011 2011 2011 2012 Tigo Cash launched in 7 markets, International remittances launched in Paraguay 15 * Restated t
Slide 16: Regional review
Regional review
Slide 17: Revenues by category-Latin America
Revenues by category-Latin America Local Contribution US$m Q1 12 Q1 11 currency to recurr. rev.* growth growth Q1 12 Communication (voice, SMS) 616 598 2.0% 24% Voice 523 511 1.1% 15% SMS 93 86 7.3% 9% Information (Data services) 144 103 37.7% 54% of which Mobile Data 104 72 50.1% 42% 100% Entertain
Slide 18: Quarterly Highlights – Central America YoY
Quarterly Highlights – Central America YoY US$m Q1 12 Q1 11 Reported Local currency growth growth Mobile customers (million) 15.1 13.8 9.0% Mobile ARPU (US$) 11.6 12.1 -4.5% -4.8% Revenues 474 455 4.3% 4.7% EBITDA 241 246 -2.1% -1.1% % of revenues 51.0% 54.1% -3.2pt Capex 51 26 94.5% % of revenues 1
Slide 19: Quarterly Highlights – South America YoY
Quarterly Highlights – South America YoY US$m Q1 12 Q1 11 Reported Local currency growth growth Mobile customers (million) 11.5 10.4 10.5% Mobile ARPU (US$) 13.1 12.3 6.4% 3.7% Revenues 455 387 17.4% 14.4% EBITDA 186 165 12.6% 10.4% % of revenues 40.9% 42.6% -1.7pt Capex* 69 28 na % of revenues 15.2
Slide 20: Revenues by category- Africa
Revenues by category- Africa Local US$m Q1 12 Q1 11 currency growth Communication (voice, SMS) 212 220 1.5% Voice 201 210 2.0% SMS 11 10 12.0% Information (Data services) 6 3 73.9% of which Mobile Data 5 3 69.0% Entertainment (TV, Ringback tones, games) 8 8 18.7% Solutions (Tigo Lends You, Give me b
Slide 21: Quarterly Highlights – Africa YoY
Quarterly Highlights – Africa YoY US$m Q1 12 Q1 11 Reported Local currency growth growth Mobile customers (million) 17.2 15.5 10.9% Mobile ARPU (US$) 4.6 5.2 -11.7% -6.8% Revenues 239 239 -0.1% 5.4% EBITDA 90 98 -8.4% -3.5% % of revenues 37.5% 40.9% -3.4 pt Capex* 42 26 57.5% % of revenues 17.4% 11.
Slide 22: Financial review
Financial review
Slide 23: Evolution of taxes
Evolution of taxes US$m Q1 12 Q4 11 Q3 11 Q2 11 Q1 11 PBT 200 243 304 214 311 Reported taxes -91 -9 166 -57 -82 of w hich: Non recurring items * -30 49 251 -12 10 Normalized tax expenses** -61 -58 -84 -45 -92 Normalized tax rate 30.6% 24.0% 27.7% 21.1% 29.7% Normalized tax rate at 30.6% impacted by
Slide 24: Normalised EPS
Normalised EPS US$ million Q1 12 Q1 11 $ growth EBITDA 517 509 1% Corporate costs -27 -22 23% Building categories Depreciation -196 -178 10% Net Finance Costs -43 -45 -4% Taxes -86 -82 5% Others -6 1 Minorities Normalized Net Profit * 159 183 -13% No. of shares (million) 101.7 105.8 Normalized EPS 1
Slide 25: Free Cash Flow
Free Cash Flow US$m 350 328 300 248 244 250 US$m Q1 12 Q1 11 Change 215 200 191 OFCF 310 249 25% Net Interest paid -44 -40 12% 150 Corporate Costs paid -22 -18 20% 100 FCF 244 191 28% 50 0 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 FCF* as % 17.7% 19.2% 28.5% 21.0% 20.9% of revenue
Slide 26: Leverage: Net Debt/EBITDA
Leverage: Net Debt/EBITDA US$m Q1 12 Q4 11 Gross Debt 2,478 2,438 Cash 1,117 881 Pledged/time deposits 53 50 Net Debt 1,308 1,507 Net Debt/EBITDA 0.6 0.7 Stable Net Debt/EBITDA ratio 26
Slide 27: Gross Debt maturity
Gross Debt maturity* US$m 600 500 400 454 300 536 527 200 345 287 329 290 100 0 < 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5-6 years Average maturity of 3 years 49% of gross debt at fixed rates 27 * Excluding finance leases
Slide 28: Guidance for 2012 (confirmed)
Guidance for 2012 (confirmed) • EBITDA margin around mid 40s • Capex not to exceed 20% of revenues • OFCF margin around 20% Capex excluding potential new spectrum, green-field cable and capitalization of leasing costs for towers transferred to tower companies OFCF= Operating Free Cash Flow: EBITDA -
Slide 29: Appendix
Appendix
Slide 30: Overview
Overview Central America: South America: Africa*: Mobile operations’ Amnet: 39m 28m 62m 180m pops under Guatemala 14m license: 270m El Salvador 6m Honduras 8m Costa Rica 5m Guatemala 14m El Salvador 6m Senegal 13m Chad 11m Nicaragua 6m Ownership: 55.0% Ownership: 100% Ownership: 100% Ownership: 100%
Slide 31: Revenue by service - LATAM
Revenue by service - LATAM + 4.5 pts 40.0% 35.1% 33.5% 33.6% 35.0% 32.4% 30.6% 30.0% 25.0% 21.7% 21.9% 23.5% 18.9% 20.8% 20.0% VAS non-SMS as a % of 15.0% Voice+VAS 10.0% VAS - SMS as % of 11.8% 11.8% Voice+VAS 5.0% 11.7% 11.6% 11.6% 0.0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 VAS revenue above 1/3 of mobile
Slide 32: Revenue by service - Africa
Revenue by service - Africa + 4.1 pts 16.0% 14.0% 14.0% 11.4% 11.8% 12.0% 10.5% 9.9% 10.0% 9.3% 8.0% 7.3% 7.5% 5.5% 6.2% VAS non-SMS as a % of 6.0% Voice+VAS 4.0% VAS - SMS as % of 4.7% Voice+VAS 2.0% 4.4% 4.3% 4.1% 4.3% 0.0% Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 VAS revenue 14% of mobile revenues (Voice +
Slide 33: Penetration rates
Penetration rates CAM SAM Africa * MIC Avg penetration Avg penetration Avg penetration Avg penetration 92.2% 99.3% 48.4% 69.8% 140.0% 116.2% 120.0% 107.0% 95.8% 93.2% 100.0% 86.9% 83.8% 80.0% 69.6% 67.6% 66.2% Average MIC 60.0% 50.2% 40.4% 40.0% 28.9% 29.0% 20.0% 0.0% * For DRC , only penetration in
Slide 34: Market Share
Market Share CAM SAM Africa MIC Avg Market Share Avg Market Share Avg Market Share Avg Market Share 55.1% 18.1% 29.8% 29.5% 80.0% 68.0% 70.0% 58.7% 58.5% 55.4% 60.0% 50.0% 42.0% 41.8% 36.1% 34.8% 40.0% 33.1% 28.9% 31.4% Average 30.0% MIC 19.8% 20.0% 10.1% 10.0% 0.0% Increase QoQ Decrease QoQ Colombi
Slide 35: Market share evolution
Market share evolution Market share* (%) Total Central Am. South Am. Africa Q1 12 29.5% 55.1% 18.1% 29.8% Q4 11 29.7% 54.1% 18.1% 30.6% Q3 11 30.4% 54.3% 18.7% 31.3% Q2 11 30.5% 54.4% 18.6% 31.7% Q1 11 29.9% 54.4% 18.2% 30.8% Focus on high value customers triggers decrease in customer market share 3
Slide 36: Movements of currencies vs USD YoY
Movements of currencies vs USD YoY Closing rate Closing rate Change Average rate Average rate Change Q1 12 Q1 11 Q1 12 Q1 11 Guatemala GTQ 7.69 7.66 0% 7.77 7.83 1% Honduras HNL 19.35 18.90 -2% 19.22 18.90 -2% Central America Nicaragua NIO 23.25 22.15 -5% 23.12 22.01 -5% Costa Rica CRC 513.58 499.00
Slide 37: Quarterly Interest expense
Quarterly Interest expense 55 50 49 47 47 45 7 44 43 7 8 2 5 40 42 41 35 40 39 39 30 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Total interest cost Other f inancial costs Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Effective 7.2% 6.9% 7.1% 6.5% 6.4% rate* 37 * Effective rate calculated on loan interest expenses
Slide 38: Market Overview – by Segment
Market Overview – by Segment Central South Millicom Segments Africa Total America America Market Overview Population (million) 28 62 180 270 Mobile Penetration 92.2% 99.3% 48.4% 69.8% Operational Data Total Mobile customers (million) 15.1 11.5 17.2 43.8 Attrib. Customers (million) 11.8 11.5 17.0 40.
Slide 39: Market Overview – LATAM
Market Overview – LATAM Latin America Central America South America El Salvador Guatemala Honduras Bolivia Colombia Paraguay Shareholding 100.0% 55% (p) 66.7% 100.0% 50% + 1 share 100.0% License Period (yrs) 20 yrs fr 1998 15 yrs fr 2003 25 yrs fr 1996 20 yrs fr 1995 10 yrs fr 2003 5 yrs renewal Dat
Slide 40: Market Overview – Africa
Market Overview – Africa Africa Chad DRC Ghana Mauritius Rwanda Senegal Tanzania Shareholding 100.0% 100.0% 100.0% 50% (p) 87.5% 100.0% 100.0% License Period (yrs) 10 yrs fr 2004 20 yrs fr 1997 15 yrs fr 2004 15 yrs fr 2000* 15 yrs fr 2008 20 yrs fr 1998 25 yrs fr 2007 Date of Expiry 2014 2017 2019
Slide 41: Thank you!
Thank you! tico ed
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