Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Merger or Acquisition (November 2021)
23 slides from Millicom International Cellular's merger presentation, Nov 12, 2021
Slide 1: Millicom to acquire full control of Tigo Guatemala
Millicom to acquire full control of Tigo Guatemala Luxembourg, November 12, 2021 1
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
Slide 4: Transaction highlights
Transaction highlights Acquiring remaining 45% in Tigo Guatemala for $2.2b in cash Accretive to EFCF and net income – adds ~$200m to 2021 EFCF1,2 Financing through long-term debt and equity rights offering Leverage expected at 3.1x, maintaining deleveraging targets Attractive valuation 1) Non-IFRS m
Slide 5: Transaction rationale
Transaction rationale Accretive acquisition enhances cash flow and simplifies structure 1 Fully aligned with our strategy Accretive minority acquisitions is a proprietary opportunity 2 Highly accretive from day 1 Incremental EFCF1,2 of c.$200m 3 Growth track record… in dollars 7% OCF USD CAGR since
Slide 6: Fully aligned with our strategy
1 Fully aligned with our strategy We have communicated our interest to continue allocating capital to our Latam markets Organic growth & free cash flow generation Capital allocation discipline Acquiring minorities in an accretive way - proprietary opportunity Committed to a maintaining healthy balan
Slide 7: Highly accretive from day 1
2 Highly accretive from day 1 Tigo Guatemala expected to grow strongly in 20211 $1.6bn Revenue $850 EBITDA2 $650m OCF2 Up 6% year-on-year EBITDA margin of 53% OCF margin of 41% Up 9% year-on-year Up 9% year-on-year $450m $350m Net income EFCF2 EFCF1 margin of 28% Up 32% year-on-year Up 25% year-on-y
Slide 8: Growth track record… in dollars
3 Growth track record… in dollars Mobile Customers Home Customers Revenue (m) (‘000s) ($bn) +5% +17% +4% 11.4 606 1.6 10.9 10.8 1.4 1.5 10.4 1.3 1.3 1.4 9.5 519 485 361 323 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2021F EBITDA1 OCF1 Net income ($m) ($m) ($m) +6% +7%
Slide 9: Sustained strong growth through the pandemic
3 Sustained strong growth through the pandemic Customer base expansion Tigo Guatemala mobile customers (m) and home customer relationships (000) Growing service 1 revenue Tigo Guatemala service revenue ($m) and YoY Growth (%) Mobile Home +9% 12 670 11 343 519 304 314 +7% +29% Q3 19 Q3 20 Q3 21 Q4 19
Slide 10: Simplification of structure
4 Simplification of structure The proforma impact on our reported 2020A results is significant Revenue EBITDA1 OCF1 ($m) ($m) ($m) +36% +52% +80% 5,661 2,270 1,342 1,490 775 4,171 595 1,495 747 Reported Tigo Proforma Reported Tigo Proforma Reported Tigo Proforma Guatemala2 Guatemala2 Guatemala2 35.8
Slide 11: Leader in underpenetrated 2-player market
5 Leader in underpenetrated 2-player market Convergent offering in a 2-player market with significant growth runway Mobile market share1 Broadband market share1 Pay TV market share1 37% 64% 42% 37% #1 11.6m subs #1 392k #2 567k subs subs 58% 63% 40% 15% 15% 4G data user Broadband Pay TV penetration
Slide 12: Strong Guatemala macro
6 Strong Guatemala macro One of the least impacted economies during COVID showing resiliency Remittances are soaring Guatemala real GDP growth (% y-o-y) Remittances ($m) 2020 15.1% +37% 11,340 (3.4%) 10,508 11,008 (4.1%) (8.3%) 8,061 7.2% LatAm & CAC (7.0%) 4.5% 3.1% 3.3% 3.9% (1.5%) 2017 2018 2019
Slide 13: Attractive valuation
7 Attractive valuation EV / OCF1 16.3x 15.7x 15.0x 13.7x 13.7x 11.4x 11.5x 11.0x 10.7x 10.7x 11.0x 8.9x 9.0x 8.2x Liberty LatAm America MovilEntelTelefonica Brazil Verizon AT&T DT Orange TelefonicaVodafone Tele2 Telia Telenor Acquisition Acquisition of remaining 45% in Tigo Latin America US Western
Slide 14: Maintaining leverage targets
8 Maintaining leverage targets Capital structure to balance shareholder return and continued deleveraging $2.2bn Purchase price $1.5bn Debt $750m Equity 3.1x Leverage Bridge financing provided Majority expected to be Up to $750m of new equity Pro-forma leverage, after by group of leading raised at T
Slide 15: Wrap up
Wrap up Compelling investment Sound financing structure • Advances our strategy • Continue deleveraging trend • Proprietary opportunity • Accretion to benefit current • Attractive valuation shareholders via rights offering • Leader in 2-player market • Leverage back below 3.0x within • Growth track
Slide 16: Tigo Investment Highlights
Tigo Investment Highlights 16
Slide 17: Tigo in Latin America
Tigo in Latin America LTM Service Revenue1 $5.7b Guatemala Honduras Mobile Fixed El Salvador Nicaragua LTM EBITDA1 Costa Rica Panama Colombia $2.5b 80% 4G population coverage +20.3m 4G clients Bolivia Guatemala Paraguay Colombia El Salvador +12.2m HFC homes passed Panama Nicaragua Paraguay Honduras
Slide 18: Latin American markets are under penetrated
Latin American markets are under penetrated 4G Data Users Broadband As % of total mobile Users As a % of total households 50% Ø 46% Guatemala Guatemala Bolivia Colombia Nicaragua Colombia Nicaragua Bolivia Panama Paraguay El Salvador Panama Costa Rica El Salvador Paraguay Honduras Honduras Pay TV Ba
Slide 19: Leading market positions with growing customer base
Leading market positions with growing customer base Mobile Customers Latam (‘000) 43,901 Guatemala 41,734 Mobile #1 Honduras 39,846 BBI #1 Mobile #1 Pay TV #2 BBI #1 Pay TV #1 33,691 Nicaragua 33,141 Mobile #1 Panama BBI #3 Mobile #1 El Salvador Pay TV #3 BBI #1 Mobile #1 Pay TV #1 BBI #2 Pay TV #2
Slide 20: Steady growth and healthy cash flow generation
Steady growth and healthy cash flow generation Service Revenue1 EBITDA1 Latam ($m) Latam ($m) Guatemala Margin (%) 5,652 Guatemala 2,515 5,514 5,377 2,418 2,360 4,959 5,069 2,022 2,072 663 689 748 778 856 1,182 1,200 1,234 1,273 1,354 2017 2018 2019 2020 LTM Q3 21 2017 2018 2019 2020 LTM Q3 21 38.0%
Slide 21: Our value creation strategy
Our value creation strategy Organic Growth Capital Allocation • Network-centric • Healthy balance sheet • ~10% OCF growth • Shareholder Our Purpose remuneration • Inorganic growth We build • Proprietary minority Digital Highways That connect people, improve opportunities lives and develop our commun
Slide 22: Our purpose is at the center of our ESG efforts
Our purpose is at the center of our ESG efforts Environment Social Governance • Top priorities: carbon footprint and • Focusing on reducing the digital gap • US, Swedish, Luxembourg e-waste. governance standards • We are defining emissions Flagship Digital Education Programs reduction targets • Inde
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