Liberty Latin America Ltd. · NASDAQ:LILA
Liberty Latin America — Q2 2020 Earnings Presentation
22 slides from Liberty Latin America's earnings presentation, Aug 6, 2020
Slide 1: Q2 2020 Investor Call
LIBERTY LATIN AMERICA Q2 2020 INVESTOR CALL August 6, 2020 Part of Liberty Latin America
Slide 2: Safe Harbor: Forward-Looking Statement and Defined Terms
“SAFE HARBOR” FORWARD-LOOKING STATEMENT | DEFINED TERMS FORWARD-LOOKING STATEMENTS AND DISCLAIMER operating companies' future financial performance, or market conditions generally, on the availability, terms and deployment of capital; fluctuations in currency exchange and interest rates; the ability
Slide 3: Agenda
AGENDA 01 | EXECUTIVE SUMMARY 02 | Q2 & H1 2020 RESULTS 03 | APPENDIX Part of Liberty Latin America
Slide 4: Liberty Latin America Key Messages
(1) LIBERTY LATIN AMERICA | KEY MESSAGES CHALLENGING QUARTER DRIVEN BY IMPACT OF COVID-19, TRENDS IMPROVING 1 Performance impacted by COVID-19, improving from April low 2 RGU growth driven by 47,000 broadband adds; record LPR performance 3 Focus on cash generation delivered Adjusted FCF of $130m 4 A
Slide 5: COVID-19 Update on Key Focus Areas
COVID-19 | UPDATE ON KEY FOCUS AREAS EXECUTING PLANS TO MANAGE THROUGH NEAR-TERM CHALLENGES & BUILDING FOR THE FUTURE • Extended working from home arrangements and • Prepared various models of financial projections: implemented office safety protocols business outperforming most scenarios PEOPLE & •
Slide 6: COVID-19 Update on Key Markets
COVID-19 | UPDATE ON KEY MARKETS VARYING LEVELS OF MOBILITY RESTRICTIONS; GENERALLY EASED FROM MOST RESTRICTIVE PERIOD PANAMA C&W ISLANDS JAMAICA • Movement remains restricted based on • Mobility restrictions vary by market • On June 15, the borders reopened for gender and ID number High impact: tou
Slide 7: Network & Commercial Initiatives
NETWORK & COMMERCIAL INITIATIVES(1) ADAPTING TO A NEW OPERATING ENVIRONMENT; CONTINUING TO INVEST & INNOVATE NETWORK INVESTMENTS PRODUCT INNOVATION OPERATIONAL IMPROVEMENTS SUBSEA DIGITAL PAYMENT • Added 400Gbps of capacity COLLECTIONS(2) FIXED • 1.8Tbps capacity added; ~30% increase in Chile ~75% •
Slide 8: Fixed: Solid Operating Performance
(1) FIXED | SOLID OPERATING PERFORMANCE DESIRE FOR HIGH-SPEED CONNECTIVITY DRIVES BROADBAND ADDITIONS RGU ADDITIONS BY SEGMENT BROADBAND ADDITIONS IN THOUSANDS IN THOUSANDS 33 28 REDUCED RGUS Q2 23 PRIMARILY RELATED TO 20 CUSTOMERS IN PANAMA RECEIVING FREE SERVICES 11 Q1 +26 20 (45) OTHERS (7) 60 38
Slide 9: Mobile & B2B: Challenging but Improving Environment
(1) MOBILE & B2B | CHALLENGING BUT IMPROVING ENVIRONMENT COVID-19 IMPACTING Q2 2020 PERFORMANCE MOBILE SUBSCRIBER EVOLUTION B2B REVENUE PERFORMANCE MOBILE ADDITIONS (LOSSES) | IN THOUSANDS IN USD MILLIONS ENTERPRISE • Enabling employee shift from (3)% REBASED office to home • Increasing bandwidth, m
Slide 10: Advancing Our Inorganic Strategy
ADVANCING OUR INORGANIC STRATEGY STRATEGIC COMBINATION TO CREATE LEADING FULL-SERVICE PLAYER IN COSTA RICA TELEFÓNICA COSTA RICA (“TEF CR”) AT&T PUERTO RICO & USVI • Continue to progress towards closing transaction COMPELLING INVESTMENT RATIONALE 2.3M • Attractive market with stable macro and SUBSCR
Slide 11: Agenda
AGENDA 01 | EXECUTIVE SUMMARY 02 | Q2 & H1 2020 RESULTS 03 | APPENDIX Part of Liberty Latin America
Slide 12: Q2 & H1 2020 Financial Results
(1) Q2 & H1 2020 FINANCIAL RESULTS DELIVERED SOLID FCF GENERATION DESPITE PRESSURE ON TOP-LINE REVENUE ADJUSTED OIBDA IN USD MILLIONS IN USD MILLIONS Q2 H1 Q2 H1 (8)% REBASED (3)% REBASED (8)% REBASED (2)% REBASED 1,926 1,780 983 849 753 697 387 333 Q2 19 Q2 20 H1 19 H1 20 Q2 19 Q2 20 H1 19 H1 20 P&
Slide 13: Q2 & H1 2020 Segment Financial Results
(1) Q2 & H1 2020 SEGMENT FINANCIAL RESULTS CHALLENGING QUARTER AT C&W & VTR/CT; CONTINUED GROWTH AT LPR IN USD MILLIONS IN USD MILLIONS IN USD MILLIONS Q2 2020 RESULTS Q2 2020 RESULTS Q2 2020 RESULTS 515 16% 228 22% 18% AS % OF AS % OF 109 AS % OF 204 REVENUE REVENUE REVENUE 86 52 82 50 20 REVENUE A
Slide 14: Sequential Adjusted OIBDA Margin Comparison
(1) SEQUENTIAL ADJUSTED OIBDA MARGIN COMPARISON COST REDUCTION DROVE STABLE MARGINS DESPITE REVENUE IMPACT 48.3% 48.0% $3M NON-FUNCTIONAL FX COST IMPACT 39.6% 39.5% 39.1% 39.2% 38.9% 37.9% Q1 20 Q2 20 Q1 20 Q2 20 Q1 20 Q2 20 Q1 20 Q2 20 • Operational efficiencies; • Margin impacted by non- • Q2 oper
Slide 15: Solid Balance Sheet
SOLID BALANCE SHEET(1) COMPLETED VTR REFINANCING & ANNOUNCING RIGHTS OFFERING REFINANCING ACTIVITY 1 LIQUIDITY(3) 3 TEF CR ACQUISITION FINANCING 5 IN USD MILLIONS • Tapped LPR Notes for $90m principal at 102.5 • $500m purchase price in May CASH RCF AVAILABILITY • Targeting ~4x leverage on the acquir
Slide 16: Conclusions
(1) CONCLUSIONS MOMENTUM SET TO BUILD 1 Broadband demand robust, impacts from COVID-19 reducing 2 Continuing to invest while delivering on cost reductions 3 Focus on delivering positive Adjusted FCF 4 Close Puerto Rico & Costa Rica acquisitions 5 Setting foundation for 2021 (1) See Appendix for defi
Slide 17: Agenda
AGENDA 01 | EXECUTIVE SUMMARY 02 | Q2 & H1 2020 RESULTS 03 | APPENDIX Part of Liberty Latin America
Slide 18: Definitions and Additional Information
DEFINITIONS AND ADDITIONAL INFORMATION FULLY-SWAPPED BORROWING COST lease obligations outstanding, including the convertible notes, net of projected derivative principal-related Represents the weighted average interest rate on our debt (excluding finance leases and including cash payments (receipts)
Slide 19: Definitions and Additional Information
DEFINITIONS AND ADDITIONAL INFORMATION INFORMATION ON REBASED GROWTH effects of acquisition accounting adjustments, (c) any significant differences between our accounting Rebase growth rates are a non-GAAP measure. For purposes of calculating rebased growth rates on a policies and those of the acqui
Slide 20: Definitions and Additional Information
DEFINITIONS AND ADDITIONAL INFORMATION INFORMATION ON REBASED GROWTH The following table set forth the reconciliation from reported to rebased Consolidated B2B revenue : Consolidated B2B Revenue Six months ended June 30, 2019 in USD millions; except for percentages Reported 595.6) Acquisition 12.9)
Slide 21: Adjusted OIBDA Definition and Reconciliations
ADJUSTED OIBDA DEFINITION AND RECONCILIATIONS Adjusted OIBDA, a non-GAAP measure, is the primary measure used by our chief operating decision represents a transparent view of our recurring operating performance that is unaffected by our capital maker to evaluate segment operating performance. Adjust
Slide 22: Adjusted Free Cash Flow Definition and Reconciliations
ADJUSTED FREE CASH FLOW DEFINITION AND RECONCILIATIONS We define Adjusted Free Cash Flows (Adjusted FCF), a non-GAAP measure, as net cash provided by used to fund a portion of the AT&T Acquisition and (iii) the impact of associated pre-acquisition derivative our operating activities, plus (i) cash p
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