Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q4 2022 Earnings Presentation
31 slides from Millicom International Cellular's earnings presentation, Feb 10, 2023
Slide 1: Millicom closes 2022 with robust free cash flow
Millicom closes 2022 with robust free cash flow Fourth Quarter 2022 Mauricio Ramos, CEO Sheldon Bruha, CFO February 10th, 2023 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 m
Slide 4: 2022 Highlights
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Slide 5: Delivering on value creation strategy
Delivering on value creation strategy EFCF1 of $171 million OCF1 organic growth of 8.4% Advancing TowerCo and Tigo Money Reduced leverage to 3.04x Science Based Targets validated Great Place to Work – 5th Globally 1) EFCF refers to EFCF excluding Africa. Group financial information does not include
Slide 6: Broad based growth across footprint
Broad based growth across footprint All business units and most countries growing All business units growing Growth across countries 2022 Service Revenue organic growth1 2022 Service Revenue local currency growth1 5.4% 7.7% 3.5% Full year 6.7% 6.6% 3.2% 4.2% 2.4% 2.8% 2.7% 2.0% 2.3% Q4 0.8% B2B Mobi
Slide 7: B2B: a key growth pillar
B2B: a key growth pillar Accelerating growth B2B Service Revenue organic growth1 5.4% 338k SME B2B Accounts 1.1% -1.7% $829m B2B Service Revenue1 2020 2021 2022 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Please refer to the non-IFRS disclos
Slide 8: Mobile growth driven by postpaid
Mobile growth driven by postpaid Postpaid growth continues Postpaid customers (‘000) Postpaid as % of total mobile customers 6,382 767k 2022 postpaid net adds 5,615 9.1% 4,536 Postpaid organic 2020 2021 2022 service revenue growth1 12% 14% 16% 1) Group financial information does not include Honduras
Slide 9: Home outlook remains positive
Home outlook remains positive Ramped up build in 2022 FTTH / HFC Homes Passed Net Adds1 (‘000) 901 822 730k Total FTTH Homes Passed 526 428 FTTH 2019 2020 2021 2022 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Please refer to the non-IFRS dis
Slide 10: Spotlight on Guatemala and Colombia
Spotlight on Guatemala and Colombia Guatemala Colombia Sequential improvement in Q4 Growing Mobile • Sustained strong EFCF generation • Postpaid customers up 20% YoY • Maintained prepaid market share • Q4 ARPU up 8% YoY, prepaid up 6% • Accelerated subscription businesses • Mobile Service Revenue1 u
Slide 11: Consistent investment in networks
Consistent investment in networks Mobile Network Upgraded Fixed Network is Fiber-Deep1 Year of Upgrade 5G Ready 2020 2021 2022 2023 +11.9m HFC Homes Passed Bolivia Colombia +730k FTTH Homes Passed El Salvador Honduras FTTH deployed in 6 markets Guatemala 5G Launched Nicaragua <300k Copper Homes Pass
Slide 12: Tigo Money 2022 progress
Tigo Money 2022 progress Digital Users Digital users up 2.7x YoY Revenue Digital Users Digital revenue up 2x YoY Lending 100,000+ micro-loans in pilot Access Card Visa agreement signed Merchant 45,000 merchants accept Tigo Money 12
Slide 13: TowerCo advancing on schedule
TowerCo advancing on schedule Pillars of value creation Operational independence 2022 Progress Increase asset utilization Corporate and governance structure Legal and regulatory due diligence Optimize capital structure Tax planning Crystallize and unlock value with partial or full monetization Maste
Slide 14: Flagship year for ESG
Flagship year for ESG 103,000 102,000 83% SBTs validated Children and teens Teachers trained CPEs recovered DE&I targets set Trained on the responsible and Training on digital tools for online productive use of the internet classes Alignment to upcoming regulations 171,000 99% 5th Women Employees Wo
Slide 15: Q4 2022 Financial Review
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Slide 16: Macroeconomic backdrop improving
Macroeconomic backdrop improving Inflation declining All countries expected to grow in 2023 Average CPI YoY Inflation in Tigo Markets (%) 2023 GDP Growth % Source: Bloomberg Source: World Bank, January 2023 5.2 4.5 8.5 8.0 3.1 3.1 3.1 2.9 3.0 2.0 2.0 1.7 1.3 1.3 0.8 0.9 4.0 0.5 Tigo Average El Salva
Slide 17: Group Service Revenue
Group Service Revenue1 YoY Organic Service Revenue1 Growth Q4 21 – Q4 22 2.3% 1,276 +10.5% 1,155 2.3% Organic Service Revenue1 Growth Q4 21 M&A, FX Rebased Mobile Fixed Q4 22 and Others Q4 21 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure. Pleas
Slide 18: Q4 2022 Service Revenue by Country
Q4 2022 Service Revenue by Country1 Service revenue ($m), and YoY local currency growth2 Guatemala (27% of Group) Colombia (22% of Group) Panama (12% of Group) Bolivia (12% of Group) +1.9% +4.4% +0.2% -4.5% 347 282 159 150 Q4 21 Q4 22 Q4 21 Q4 22 Q4 21 Q4 22 Q4 21 Q4 22 Paraguay (10% of Group) El Sa
Slide 19: Group EBITDA
Group EBITDA 1 YoY Organic EBITDA1 Growth Q4 21 – Q4 22 1.8% 548 1.8% Organic EBITDA1 Growth 18.8% A B Key Drivers 461 A Higher content and bad debt expenses B Lower selling and marketing Q4 21 M&A, FX Rebased Revenue Direct Net Opex Q4 22 EBITDA and Others Q4 21 Growth Costs EBITDA Higher energy 39
Slide 20: Q4 2022 EBITDA by Country
Q4 2022 EBITDA by Country1 EBITDA2 ($m), and YoY local currency growth2 Guatemala (36% of Group) Colombia (16% of Group) Panama (13% of Group) Paraguay (10% of Group) +2.6% +4.0% +6.7% -1.8% 213 92 75 60 Q4 21 Q4 22 Q4 21 Q4 22 Q4 21 Q4 22 Q4 21 Q4 22 51.4% 52.7% 30.2% 30.9% 46.6% 45.5% 41.8% 42.8%
Slide 21: Margins broadly stable despite macro
Margins broadly stable despite macro Group EBITDA1 Margin (%) 40.0% 39.9% 39.7% 39.0% 39.4%2 Inflation impacts • Energy • Employee costs Additional investments • Tigo Money and TowerCo Carve-outs Pricing actions in Q4 • Home - across out footprint • Prepaid - in 2 markets • Postpaid - in 2 markets I
Slide 22: Project Everest broad in scope
Project Everest broad in scope Focused on efficiencies… … in all operations Convergence HQ Guatemala Commercial Opex Bolivia Honduras Network Opex Colombia Nicaragua IT Costa Rica Panama Capex El Salvador Paraguay Ambition is to achieve run rate benefits of more than $100 million by year-end 2024 22
Slide 23: Group OCF
Group OCF1 YoY Organic OCF1 Growth 2021 – 2022 8.6% adjusted for one offs in 2021 and 2022 +8.4% 1,225 1,255 1,264 8.4% 112.4% Organic OCF1 595 Growth FY 21 M&A, FX Rebased EBITDA Capex FY 22 2022 Africa Rebased & Others 2021 Capex 2022 OCF1 Margin 21.7% 22.5% 1) Group financial information does not
Slide 24: Equity Free Cash Flow
Equity Free Cash Flow Equity Free Cash Flow1 FY 2022 EBITDA including discontinued operations 2,252 Cash Capex (957) $171m Taxes (316) Finance charges (403) Lease payments (285) Changes in working capital & other (121) Spectrum (93) 2022 EFCF1 excluding Africa Repatriation from JVs and associates 84
Slide 25: Leverage declined in 2022
Leverage declined in 2022 Group financial obligations1 ($m) Net Debt Net Financial Obligations -1,049 -1,201 6,814 7,981 171 1,167 6,780 1,016 717 263 290 187 5,765 6,814 5,765 Net debt1 EFCF Rights Africa Exit Panama FX & Others Net debt1 31-Dec-21 31-Dec-22 31-Dec-21 Excl. Africa Offering Minority
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Slide 27: Group Financial Highlights – FY 2022
Group Financial Highlights – FY 2022 Group Consolidated Financial Statements1 Selected P&L data Key Observations $ million FY 2022 FY 2021 % Var Revenue 5,624 A 4,261 32.0% •A Consolidation of Guatemala operations Cost of sales (1,506) (1,197) (25.7)% Operating expenses (1,890) (1,546) (22.3)% •B In
Slide 28: Debt Maturity Schedule
Debt Maturity Schedule $m Q4 22 Average maturity 5.7 Years Average cost of debt 6.3% Telecel $503m 5.875% Cable 31s Comcel 29s Onda $808m $881m 28s $675m $600m 4.500% 5.125% $450m 6.250% 4.500% 5.125% SEK 26s 2.25bn SEK 2bn $148m 4.913%1 6.625% 7.299%2 1) Fully swapped rate 2) Fully swapped currency
Slide 29: Capital Structure
Capital Structure Financial obligation profile As of December 31, 2022 Target Fixed or Swapped Variable 82% 18% Local Other 40% 60% 5Y or more Less than 5Y 55% 45% Latam HQ 67% 33% Bonds Banks Leases 64% 23% 13% *Excluding Leases. El Salvador's official unit of currency is the U.S. dollar, while Pan
Slide 30: Financial obligations by country
1 Financial obligations by country Honduras Guatemala: (not consolidated): Gross: $1,659m Gross: $357m Net: $1,524m Net: $330m Nicaragua: Leverage: 1.78x Leverage: 1.26x Gross: $272m Group: Net: $254m Gross: $7,820m El Salvador: Leverage: 2.33x Gross: $289m Net: $6,780m Net: $247m Of which Leases: L
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