Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q1 2019 Earnings Presentation
33 slides from Millicom International Cellular's earnings presentation, Apr 23, 2019
Slide 1: A strong start to 2019
A strong start to 2019 Mauricio Ramos, CEO Tim Pennington, CFO April 23rd, 2019 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: Agenda
Agenda A strong start to 2019 1 Tigo today 2 Q1 Financial Highlights 3 Wrap up 4 Q&A 4
Slide 5: Our transformation over the past four years…
1 Our transformation over the past four years… FROM TO Cable + convergence Mobile-only High-speed data (4G) Voice + SMS STRATEGY Subscription-driven Prepaid Compliance leader Purpose driven Legacy network State-of-the-Art (4G, HFC) Analog NETWORK Digital Legacy IT OTT like Product & Sales Driven CUS
Slide 6: …has continued over the past six months
1 …has continued over the past six months October November December January February March Announced Announced acquisition of TEF acquisition of Closed Cable Panama, Costa Rica Announced Cable Onda Onda acquisition US listing and Nicaragua sale of Chad Buy leading Expand investor Buy FMC Exit Africa
Slide 7: Today, Tigo is a market leader in its Latam markets…
1 Today, Tigo is a market leader in its 9 Latam markets… Guatemala Honduras #1 Mobile #1 Mobile #2 Broadband #1 Broadband #1 PayTV #2 PayTV El Salvador #2 Mobile Nicaragua #2 Broadband * #1 Mobile #2 PayTV #2 PayTV Costa Rica* #2 Mobile #2 Broadband Colombia #1 PayTV #3 Mobile #2 Broadband #2 PayTV
Slide 8: ...and well positioned for a convergent future
1 ...and well positioned for a convergent future Guatemala Honduras El Salvador Nicaragua Costa Rica Panama Colombia Bolivia Paraguay Pending acquisition of TEF CAM operations Mobile Broadband Pay TV 8
Slide 9: ...and with a more predictable and diversified mix
1 ...and with a more predictable and diversified mix With Cable Onda With CAM assets our Q1 revenue* mix was: our EBITDA mix will be: EBITDA**, 61% Subscription FY18 Costa Rica / Nicaragua Bolivia 8% 9% 13% based on prop. 41% Cable Panama contribution 10% Colombia 19% 35% Investment Grade Para
Slide 10: We are rapidly growing in cable...
1 We are rapidly growing in cable*... HFC homes passed (millions), HFC customer relationships (millions), Q1 15 – Q1 19 Q1 15 – Q1 19 10.7 3.2 +14% +17% +15% +13% +16% +10% +13% +9% Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 HFC RGUs (millions), Home service reve
Slide 11: ... and we have returned to growth in mobile
1 ... and we have returned to growth in mobile* 4G coverage and PoP, 4G subscribers (m), Mobile service revenue growth, organic YoY Q1 17 – Q1 19 Q1 17 – Q1 19 Q1 17 – Q1 19 9,524 +36% 1.9% 1.4% 1.1% 1.0% 0.5% 1.0% 6,958 67% -0.8% 4,664 10.8 59% 7.9 48% -3.6% 4.1 -5.2% Q1 17 Q1 18 Q1 19 Q1 17 Q1 18
Slide 12: We have accelerated Guatemala…
1 We have accelerated Guatemala… Service revenue growth, organic YoY Service revenue, Q1 17 – Q1 19 FY 2018 Other Cable 0.1% 15.3% 7.0% 5.7% -4.3% 84.6% Mobile Q1 17 Q1 18 Q1 19 12
Slide 13: ...and turned around Colombia...
1 ...and turned around Colombia... LTM customer relationship net additions, Service revenue growth, EBITDA organic growth, HFC and Other (000s), Q1 17 – Q1 19 Q1 17 – Q1 19 Q1 17 – Q1 19 6.6% 37% 61% 127 92 2.8% 10.3% 57 0.6% 0.6% -79 -0.3% -87 -110 -8.5% -1.6% -3.2% Q1 17 Q1 18 Q1 19 Q1 17 Q1 18 Q1
Slide 14: ...and Honduras...
1 ...and Honduras... Service revenue growth, EBITDA organic growth, Q1 17 – Q1 19 Q1 17 – Q1 19 3.1% 4.3% 0.0% -0.8% -1.0% -1.1% Q1 17 Q1 18 Q1 19 Q1 17 Q1 18 Q1 19 14
Slide 15: ...and we are delivering on Panama
1 ...and we are delivering on Panama Integration progressing according to plan Preparing for mobile acquisition On track with 2019 guidance Service revenue growth in Q1 4.3% EBITDA growth in Q1 8.3% 15
Slide 16: … while re-allocating capital with discipline and on strategy …
1 … while re-allocating capital with discipline and on strategy … Disposing non-strategic assets Strengthening Latam leadership #1/#2 Player Subject to approvals Sale to Maroc Telecom Subject to approvals 16
Slide 17: …and improving our financial profile
1 …and improving our financial profile Return on invested capital*, Underlying Equity free cash flow* %, FY 15 – FY 18 $m, FY 14 – FY 18 375 356 269 235 18.2% 16.2% 13.1% 11.7% -43 2015 2016 2017 2018 2014 2015 2016 2017 2018 17 *Metrics for our Latam and Africa segments combined, as historically re
Slide 18: Latam continues to accelerate
1 Latam continues to accelerate Latam segment service revenue organic* growth Latam segment EBITDA organic* growth %YoY, Q1 18 - Q1 19 %YoY, Q1 18 - Q1 19 4.5% 3.7% 3.4% 1.3% -1.3% -0.6% Q1 17 Q1 18 Q1 19 Q1 17 Q1 18 Q1 19 *EBITDA and organic growth are non-IFRS measures. Please refer to the non-IFR
Slide 19: Q1 financial highlights
2. Q1 financial highlights
Slide 20: Group P&L – Q1 2019
2 Group P&L – Q1 2019 Selected P&L data Key Observations US$ million Q1 19 Q1 18 % Var A• Equity accounting for Guatemala and Revenue 1,065 1,013 5.1% Honduras in IFRS financial statements Cost of sales (300) (277) 8.1% Operating expenses (388) (409) (5.1%) B• IFRS16 impact and one-off expenses Depr
Slide 21: Latam segment reconciliations
2 Latam segment reconciliations Group revenue to Latam service revenue bridge, Q1 19 1,550 124 1,426 95 1,331 485 1,065 Revenue Guatemala Underlying Africa Latam Telephone and Latam service and Honduras revenue revenue revenue equipment revenue Group operating profit to Latam EBITDA bridge, Q1 19 59
Slide 22: Latam service revenue
2 Latam service revenue Service revenue* ($m) and growth* contribution YoY, Q1 18 - Q1 19 1,354 3.7% 1,331 70 36 1,284 11 Service revenue FX Mobile Cable & Service revenue Q1 18 other fixed Q1 19 adj. to include Panama *Service revenue and organic growth are non-IFRS measures. Please refer to the no
Slide 23: Latam service revenue by country
2 Latam service revenue by country Guatemala (23% of Latam) Honduras (10% of Latam) Panama (7% of Latam) El Salvador (7% of Latam) Service revenue ($m), and YoY organic growth*, Q1 18 – Q1 19 +7.0% +3.1% +4.3% -7.6% 297 303 138 138 100 96 88 Q1 18 Q1 19 Q1 18 Q1 19 Q1 18 Q1 19 Q1 18 Q1 19 Colombia (
Slide 24: Latam EBITDA
2 Latam EBITDA EBITDA* ($m) and organic growth* YoY, Q1 18 - Q1 19 591 42 553 4.5% 28 24 549 526 EBITDA FX Organic IFRS 16 EBITDA Q1 18 Q1 19 adj. to include Panama EBITDA Margin 38.5% 41.5% 38.2% *EBITDA and organic growth are non-IFRS measures. Please refer to the non-IFRS disclosures in this pres
Slide 25: Latam EBITDA by country
2 Latam EBITDA by country Guatemala (30% of Latam) Honduras (11% of Latam) Panama (7% of Latam) El Salvador (6% of Latam) EBITDA($m) and margin, and YoY organic growth*, Q1 18 – Q1 19 +7.4% +4.3% +8.3% -13.9% 174 190 61 66 44 37 35 Q1 18 Q1 19 Q1 18 Q1 19 Q1 18 Q1 19 Q1 18 Q1 19 52.1% 55.3% 42.5% 45
Slide 26: Latam OCF
2 Latam OCF OCF (EBITDA-Capex)* ($m) and organic growth* YoY, Q1 18 - Q1 19 423 42 382 27 26 355 OCF FX Organic IFRS 16 OCF Q1 18 Q1 19 adj. to include Panama 28.3% OCF Margin 29.7% *OCF and organic growth are non-IFRS measures. Please refer to the non-IFRS disclosures in this presentation for a des
Slide 27: Capital structure
2 Capital structure Ratings affirmed post financing for Cable Onda and CAM acquisitions Net debt evolution Highlights $ million, December 31, 2018 –March 31, 2019 • Financing for TEF CAM acquisition in process 854 • $750 million 6.25% senior notes due 2029 30 • Paraguay bond refinancing 0 7 43 6,050
Slide 28: Wrap up
3 Wrap up A strong start to 2019 1. Service revenue growth improved to 3.7% • Mobile growth continues • Home growing double digits 2. EBITDA grew 4.5% in the quarter 3. Panama on track 4. Further progress on capital allocation • Acquired TEF Central America • Disposal of Chad 5. Prepared for Central
Slide 29: Q&A
tico Q&A ww
Slide 30: Gross debt by country
Gross debt by country Central America: South America: Africa: Corporate: Total MIC Debt: Total debt $2,473m Total debt $2,170m Total debt $372m Total debt $2,279m $7,294m 22% guaranteed 3% guaranteed 38% guaranteed 0% guaranteed 10% Guaranteed Honduras: $455m (27% guaranteed) Guatemala: $1,184m Chad
Slide 31: Net debt by country
Net debt by country Central America: South America: Africa: Total MIC : Corporate: $2,168m $1,928m $312m $6,050m $1,641m Leverage: 1.62x Leverage: 1.79x Leverage: 1.89x Leverage: 2.55x Honduras: $431m Leverage: 1.58x Guatemala: $959m Chad: $45m Leverage: 1.36x El Salvador: $344m Leverage: 2.61x Cost
Slide 32: Currency exposure of debt
Currency exposure of debt March 2019 Debt including finance leases Cash Net debt US$ Local Total Total USD Local Total 1,730 2,913 4,643 547 1,526 2,571 4,097 Latin America* 37% 63% 100% 37% 63% 100% 90 282 372 60 55 257 312 Africa 24% 76% 100% 18% 82% 100% 2,219 60 2,279 638 1,588 54 1,641 Corporat
Slide 33: Millicom - The Digital Lifestyle
tico MILLICOM THE DIGITAL LIFESTYLE
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