Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q3 2020 Earnings Presentation
32 slides from Millicom International Cellular's earnings presentation, Oct 30, 2020
Slide 1: Getting Back on Track – Third Quarter 2020
Getting Back on Track Third Quarter 2020 Mauricio Ramos, CEO Tim Pennington, CFO October 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. Operational and Financial Highlights
1. Operational and Financial Highlights
Slide 5: Our Purpose
Our Purpose We build the digital highways that connect people, improve lives and develop our communities Mission : We will have the fastest digital highway and be the first choice for customers in all our markets that connect people, improve lives and develop our communities More focused than ever d
Slide 6: Key messages
Key messages 1 Record customer net additions 2 Revenue and EBITDA improving 3 Solid cash flow generation and debt reduction 4 Continued investment for the long-term 6
Slide 7: Record net additions in Mobile and Home
Record net additions in Mobile and Home 1.7m Mobile net additions 157k Home net additions Latam mobile customers (‘000) Latam home customer relationships* (‘000) Q1 20- Q3 20 Q1 20- Q3 20 +157 4,453 35,000 34,711 +1,706 34,709 34,371 4,391 39,449 39,483 34,000 33,141 33,000 4,296 37,777 32,000 31,00
Slide 8: Results improved sequentially in Q3
Results improved sequentially in Q3 Latam Service revenue and EBITDA above Q2 but below pre-COVID levels Service Revenue EBITDA Latam Service Revenue* (m) Latam EBITDA* (m) Q1 20- Q3 20 Q1 20- Q3 20 1,395 600 +7% 581 +4% 1,318 544 1,270 Q1 2020 Q2 2020 Q3 2020 Q1 2020 Q2 2020 Q3 2020 *Non-IFRS measu
Slide 9: Sequential improvement in countries & Mobile
Sequential improvement in countries & Mobile Every country showed improvement… …driven by Mobile Service revenue* YoY organic growth*(%) Service revenue YoY organic growth* (%), Q2 20 and Q3 20 Q2 20 and Q3 20 3.9% 1.2% -0.2% -1.7% -2.6% -4.3% -6.0% -9.4% -10.6% -8.5% Mobile Home B2B B2C Paraguay El
Slide 10: Solid cash flow generation
Solid cash flow generation Maintained Latam OCF at $1.4b… …and further reduced net debt since Q1 Latam LTM OCF* (m) Underlying net debt (m) 2018 – LTM Q3 20 Q3 19 - Q3 20 1.4 1.4 -239 5,944 35,000 34,711 34,709 34,371 34,000 33,141 5,860 33,000 1.1 32,000 5,785 5,778 31,000 30,000 5,705 29,000 28,00
Slide 11: Guatemala – Strong performance continues
Guatemala – Strong performance continues Service revenue back in black Mobile customers recovered Service revenue* organic growth (%) Mobile customers (‘000) Q3 19- Q3 20 Q3 19- Q3 20 10,904 10,817 4.8% 10,708 10,648 10,576 3.9% 3.7% 3.2% Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Home accelerated Home customer
Slide 12: Panama – Strong Mobile and Home
Panama – Strong Mobile and Home Mobile customers +5% YoY Tigo brand launch Mobile customers (‘000) Q3 19- Q3 20 +5% 1,838 1,766 1,776 1,744 1,675 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Broadband subscribers +10% YoY Solid cash flow HFC Home broadband subscribers (‘000) Q3 19- Q3 20 +10% OCF* $160m OCF* margi
Slide 13: Colombia - Executing on our long-term strategy
Colombia - Executing on our long-term strategy Mobile gaining momentum Home footprint expanding Mobile customer net additions (‘000) HFC homes passed (‘000) Q4 19- Q3 20 Q4 19- Q3 20 506 444 62 -286 -431 Q4 19 Q1 20 Q2 20 Q3 20 Q4 19 Q3 20 With network investment With rising penetration HFC home cus
Slide 14: Home network expansion and rising penetration
Home network expansion and rising penetration Over 300k new homes passed YTD… …and 174k new customer relationships YTD Latam HFC homes passed (‘000) Latam HFC home customer relationships* (‘000) Q4 19 - Q3 20 Q4 19 - Q3 20 11,762 3,630 35,000 34,711 34,709 34,371 34,000 33,141 33,000 302 174 32,000
Slide 15: Continuing to invest in our mobile network
Continuing to invest in our mobile network Over 1k new PoPs in last 6 months Key Mobile network investment programs Latam Points of Presence Q1 20 - Q3 20 +1,100 Colombia El Salvador 13,800 LTE Deployment Leveraging AWS 35,000 34,711 34,709 on 700 MHz spectrum 34,371 34,000 13,200 33,141 1,070 800 S
Slide 16: Tigo Money growing
Tigo Money growing Users Transactions Volumes Latam MFS customers* (m) Latam MFS digital transactions* (m) Latam MFS circulated value* ($) Q3 19 – Q3 20 Q3 19- Q3 20 Q3 19 - Q3 20 +18% +134% +31% Latam 5m 14m $2.6b LTM Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 *MFS customers includes both Tigo and non-Tig
Slide 17: Digital adoption acceleration continues
Digital adoption acceleration continues Subscription: digital collection +52% Q3 vs. Q1 eSales Subscriptions: +84% Q3 vs. Q1 Latam digital collections ($) Latam digital eSales Subscriptions* (events) Q1 20 – Q3 20 Q1 20 – Q3 20 +52% +84% Q1 2020 Q3 2020 Q1 2020 Q3 2020 Digital as % of Digital as % o
Slide 18: 2. Q3 Financial Review
2. Q3 Financial Review
Slide 19: Group results summary – Q3 2020
Group results summary – Q3 2020 Group revenue to Latam service revenue* bridge, Q3 20 1,538 94 1,445 126 1,318 512 1,026 Revenue Guatemala Underlying* Africa Latam Telephone and Latam service and Honduras revenue revenue revenue equipment revenue* Group operating profit to Latam EBITDA* bridge, Q3 2
Slide 20: Latam financial highlights - Q3 2020
Latam financial highlights - Q3 2020 YoY organic growth* for Service revenue, EBITDA and OCF ($m) Q3 19 – Q3 20 Service Revenue* EBITDA* OCF* -3.1% -1.0% -5.6% 1,318 362 581 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Q3 2019 Q3 2020 41.4% 40.2% 25.0% 24.8% % of revenue *Non-IFRS measure. Please refer to the no
Slide 21: Latam service revenue – Q3
Latam service revenue – Q3 Service revenue ($m)* -4.7% 1,383 -3.1% -4.3% 1.2% -8.5% 1,318 Q3 19 Mobile Home B2B Fx, M&A, and Other Q3 20 Reported B2C Service Revenue* YoY Organic Growth *Non-IFRS measure. Please refer to the non-IFRS disclosures in this presentation for a description of non-IFRS mea
Slide 22: Q3 Latam service revenue by country
Q3 20 Latam service revenue by country Service revenue ($m), and YoY organic growth*, Q3 19 – Q3 20 Guatemala (24% of Latam) Honduras (10% of Latam) Panama (11% of Latam) El Salvador (6% of Latam) 3.9% -6.0% -9.4% -2.6% 314 128 139 84 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Colombia (24% of
Slide 23: Q3 Latam EBITDA by country
Q3 20 Latam EBITDA by country EBITDA($m), and YoY organic growth*, Q3 19 – Q3 20 Guatemala (31% of Latam) Honduras (10% of Latam) Panama (10% of Latam) El Salvador (5% of Latam) 3.2% -15.7% -15.6% -9.1% 191 61 63 32 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 Q3 19 Q3 20 51.8% 50.3% 49.1% 44.1% 50.5% 43.7%
Slide 24: Proforma Debt Maturity Schedule
Proforma Debt Maturity Schedule Lowering our cost and extending our maturities** Q3 20 Proforma** Refinancing activity in October: Q3 20 • Announced $800m Comcel redemption (2024) Average maturity 5.3 Years 6.4 Years • Refinanced revolving credit facility with new 5-year ESG-linked RCF Average cost
Slide 25: Proforma net financial obligations and leverage
Proforma net financial obligations and leverage Reduced underlying net debt by $239m in last six months 1,289 6,995 5,860 178 67 5,705 102 298 Underlying Underlying Spectrum M&A FX & Others Underlying net Leases Underlying net debt* Equity debt* Q3 2020 net financial YE 2019 FCF* obligations* Q3 202
Slide 26: Wrap-up
Wrap-up Record customer net additions Revenue and EBITDA improving Solid cash flow generation and debt reduction Continued investment for the long-term 26
Slide 27: Q&A
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Slide 28: Financial highlights – Q3 2020
Financial highlights – Q3 2020 IFRS Group Consolidated Financial Statements Selected P&L data Key Observations $ million Q3 2020 Q3 2019 % Var •A Accelerated depreciation and brand Revenue 1,026 1,097 (6.5)% amortization in Panama Cost of sales (286) (302) (5.1)% Operating expenses (369) (392) (5.7)
Slide 29: Capital structure
Capital structure Gross debt profile September 30, 2020 Latam HQ Africa Geography 59% 39% 3% Interest Fixed or Swapped Variable rates 77% 23% FX Local Hard currency exposure 34% 66% Less than 5y 5Y or more Maturity 37% 63% Bonds Banks Leases Source 60% 25% 15% 29
Slide 30: Gross financial obligations by country
Gross financial obligations* by country Central America South America Africa Corporate Group (underlying) $3,110m $2,166m $418m $2,805m $8,498m 8% guaranteed 0% guaranteed 0% guaranteed 0% guaranteed 3% Guaranteed Of which Leases: $1,289m Guatemala: $1,170m Honduras: $431m (0% guaranteed) (0% guaran
Slide 31: Net financial obligations by country
Net financial obligations* by country Central America South America Africa Group (underlying) Corporate $2,600m $1,901m $403m $6,995m $2,091m Leverage: 3.02x Guatemala: $890m Honduras: $352m Leverage: 1.18x Leverage: 1.40x El Salvador: $197m Nicaragua: $120m Leverage: 1.49x Leverage: 1.35x Costa Ric
Slide 32: Millicom – The Digital Lifestyle
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