Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q1 2020 Earnings Presentation
32 slides from Millicom International Cellular's earnings presentation, Apr 30, 2020
Slide 1: Our Purpose in action – First Quarter 2020
Our Purpose in action First Quarter 2020 Mauricio Ramos, CEO Tim Pennington, CFO April 30th, 2020 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
Slide 4: 1. COVID-19 update
1. COVID-19 update
Slide 5: Phases of our response
Phases of our response Phase 1 Phase 2 Phase 3 First Now Post 8 6-12 COVID- Weeks Months 19 • Initial Crisis Management • Principles to Guide Decision Positioned for Market Response Making During Crisis Recovery • Employee Safety • 2020 Re-planning • Service Continuity • Special Task Force Capturing
Slide 6: Diligent phase-one response
Diligent phase-one response… Phase 1 Activate Crisis Management Team led by CEO Prepare our employees to ensure continuity of operations Ensure stability of our networks Support mobile, home and B2B customers through commercial offerings and services Monitor financial performance and stress test Pro
Slide 7: Status of outbreak in our countries
Status of outbreak in our countries Phase 1 Confirmed COVID-19 cases in our markets Government reaction Doubling Doubling Doubling 1,000,000 Cases every day every 2 days every 3 days Quarantine Opening Country Cases per M Level date Pop 100,000 Bolivia 1,014 89 High May 10 Doubling Colombia 5,597 11
Slide 8: Initial challenges and responses
Initial challenges and responses Phase 1 Challenge Response • Disruption to distribution Mobility • Increased digital channels restrictions channels • New ad hoc channels • Reduced demand (mobile) • Lifeline products Regulatory • Limitations on disconnections • Installation fees Network • Surge in n
Slide 9: What we’ve seen so far
What we’ve seen so far Phase 1 Business Unit KPIs Prepaid Postpaid Home B2B Reloads down, Net adds Customer base Corporate and impacted by Government -56k Stable lockdowns Stable Digital reloads up Lower gross adds Early success with SME churn up but churn down Lifeline product significantly ~2x ~25
Slide 10: Digital adoption is moving faster
Digital adoption is moving faster Phase 1 Digital Reloads Digital Collections TigoMoney Daily Users +41% since December +45% since December +129% since December % Penetration % Penetration Reload ($M) Collection ($M) +129% +45% +41% Dec-19 Mar-20 Apr-20 Dec-19 Mar-20 Apr-20 Dec-19 Mar-20 Apr-20 + 33
Slide 11: Macroeconomic impact in Latin America
Macroeconomic impact in Latin America Phase 2 Latam GDP Growth* (%) Forecast 2020 GDP Growth* (%) Tigo Latam Average 2020f Latam Big 5* 4.0 2.9 1.8 0.6 -1.2 -1.8 -2.0 -2.0 -2.3 -3.4 -3.3 -4.3 -4.3 Nicaragua Paraguay El Salvador Bolivia Honduras Colombia Panama Costa Rica Guatemala -2.7 -4.2 2019e 20
Slide 12: Principles to guide the business during the crisis
“Principles” to guide the business during the crisis Phase 2 People •1 Employee safety and well-being •2 Maintain family income 3 Reinforce our sense of purpose- SangreTigo Market •1 Pivot to customer service and retention •2 Protect market share •3 Brand equity value enhancement Capital allocation
Slide 13: New measures for a new reality
New measures for a new reality Phase 2 Protect OCF Protect balance sheet and preserve liquidity Cancelling Costs >$100m $100m + 2020 Dividend Suspending Capex $200-$300m $150m Buybacks $550-$650m in cash flow measures 13
Slide 14: Looking into a post-COVID world
Looking into a post-COVID world… Phase 3 1 A new and stronger digital wave • Acceleration of ecommerce, online education, remote work, digital payments • Re-allocation of resources to digital connections 2 Increased importance of business continuity planning • Cloud based solutions, redundant networ
Slide 15: 2. Q1 2020 financial review
2. Q1 2020 financial review
Slide 16: Q1 20 Latam Key Trends
Q1 20 Latam Key Trends Service revenue, EBITDA and OCF ($m) and YoY organic growth*, Q1 19 – Q1 20 Service Revenue* EBITDA* OCF* 0.2% -2.5% -3.9% 1,395 600 427 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 *Non-IFRS measure. Please refer to the non-IFRS disclosures in this presentation for a descr
Slide 17: Latam service revenue – COVID-19 impact
Latam service revenue – COVID-19 impact Prepaid and B2B facing largest impact Lockdowns have hit revenue Service revenue organic growth* (%), Service revenue* impact of lockdowns by country Q1 20 Smaller Nicaragua Prepaid -2.7% El Salvador Guatemala Service revenue* Paraguay Postpaid 3.7% Panama imp
Slide 18: Q1 20 Latam Service Revenue by Country
Q1 20 Latam Service Revenue by Country Service revenue ($m), and YoY organic growth*, Q1 19 – Q1 20 Guatemala (23% of Latam) Honduras (10% of Latam) Panama (11% of Latam) El Salvador (6% of Latam) +4.8% -2.3% -5.2% -0.9% 319 133 148 88 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Colombia (24% of
Slide 19: Q1 20 Latam EBITDA by Country
Q1 20 Latam EBITDA by Country EBITDA($m), and YoY organic growth*, Q1 19 – Q1 20 Guatemala (30% of Latam) Honduras (10% of Latam) Panama (11% of Latam) El Salvador (6% of Latam) +1.6% -3.0% +1.0% +0.7% 194 64 69 35 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 Q1 19 Q1 20 55.3% 52.5% 45.2% 45.1% 44.6% 45.6% 3
Slide 20: Q1 20 Latam EBITDA
Q1 20 Latam EBITDA EBITDA ($m) and YoY organic growth*, Q1 19 – Q1 20 Colombia FX impact of $15m +2.3% -2.5% 16 600 18 587 46 Impacted by $8m one-off EBITDA Perimeter** Organic Organic Growth Organic FX and Others EBITDA Q1 19 EBITDA Q1 19 EBITDA Q1 20 Q1 20 EBITDA 41.2% 39.9% Margin *Non-IFRS measu
Slide 21: COVID-19 Financial Management
COVID-19 Financial Management 1• Replan – Capex and Opex Protect 2• Revise investment practices OCF 3• Change payment terms 1• Secure liquidity Protect the 2• Stress test Balance Sheet 3• Manage FX Risk 4• Focus on daily collections 21
Slide 22: Balance sheet and liquidity
Balance sheet and liquidity Cash Liquidity Maturities Cash ($b), Q1 20 Debt maturities ($b), Q1 20 Average maturity 6.1 years 2.0 Average cost of debt 5.8% 0.4 2.9 2.4 0.3 1.3 0.3 1.6 2.1 1.1 1.4 0.5 0.8 0.2 0.3 0.1 0.2 2020 2021 2022 4-5 years 6-9 years >10 years Headquarters 100% Partially Total O
Slide 23: Latam Operating Cash Flow
Latam Operating Cash Flow Last-twelve-month OCF Last-twelve-month OCF by Latam region LTM OCF* ($b), Q1 20 OCF* by region, Q1 20 2.4 South 1.0 America Colombia 32% 1.4 Paraguay Central 68% America Bolivia EBITDA Capex OCF *Non-IFRS measure. Please refer to the non-IFRS disclosures in this presentati
Slide 24: Net financial obligations and leverage
Net financial obligations and leverage FX reduced net financial obligations by $175m $78m decrease due to FX 10 122 1,274 1,376 18 31 -97 7,236 7,219 5,944 5,860 Underlying Leases Underlying Underlying Spectrum Share FX Others Underlying Leases Underlying net net debt* Equity Buy Back net debt* net
Slide 25: Wrap up
Wrap up 1• Our response was immediate and our crisis management is working very well 2• We have strong liquidity and aim to strengthen our balance sheet 3• We have adapted our business and financial priorities to protect OCF, our customer base and our brand equity value 4• We are optimistic about th
Slide 26: Q&A
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Slide 27: Financial Highlights – Q1 2020
Financial Highlights – Q1 2020 IFRS Group Consolidated Financial Statements Selected P&L data Key Observations $ million Q1 2020 Q1 2019 % Var •A Increased revenue due to acquisitions Revenue 1,088 A 1,035 5.1% Cost of sales (305) (291) 4.6% •B Increased D&A due to acquisitions Operating expenses (4
Slide 28: Latam segment bridge – Q1 2020
Latam segment bridge – Q1 2020 Group revenue to Latam service revenue bridge, Q1 20 1,592 89 1,504 110 1,395 505 1,088 Revenue Guatemala Underlying * Africa Latam Telephone and Latam service and Honduras revenue revenue revenue equipment revenue* Group operating profit to Latam EBITDA* bridge, Q1 20
Slide 29: Capital structure
Capital structure Financial obligation profile March 31, 2020 Latam HQ Africa Geography 60% 35% 5% Bonds Banks Leases Source 57% 29% 14% Interest Fixed or Swapped Variable rates* 74% 26% FX Local Hard currency exposure* 33% 67% Less than 5y 5Y or more Maturity* 42% 58% * Excluding Leases 29
Slide 30: Gross financial obligations by country
Gross financial obligations* by country Central America South America Africa Corporate Group (underlying) $3,230m $2,185m $435m $3,117m $8,967m 13% guaranteed 0% guaranteed 0% guaranteed 0% guaranteed 5% Guaranteed Of which Leases: $1,274m Guatemala: $1,168m Honduras: $421m (0% guaranteed) (0% guara
Slide 31: Net financial obligations by country
Net financial obligations* by country Central America South America Africa Group (underlying) Corporate $2,907m $1,838m $412m $7,219m $2,061m Leverage: 1.82x Leverage: 1.79x Leverage: 3.25x Leverage: 2.80x Guatemala: $1,018m Honduras: $370m Leverage: 1.35x Leverage: 1.33x El Salvador: $345m Nicaragu
Slide 32: Millicom – The Digital Lifestyle
tico MILLICOM THE DIGITAL LIFESTYLE
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