Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Citi Communications Services Conference 2020
33 slides from Millicom International Cellular's conference presentation, Mar 17, 2020
Slide 1: Investor Presentation, Citi Communications Services Conference
Investor Presentation Citi Communications Services Conference March 2020 Mauricio Ramos, CEO Tim Pennington, CFO 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: 1. COVID-19 Update
1. COVID-19 Update
Slide 5: COVID-19 Update
COVID-19 Update Governments in our markets are being proactive with different measures and restrictions: Country COVID-19 COVID-19 Travel / Entry Schools / Public Public Confirmed Confirmed Restrictions Institutions Gathering Cases* Deaths* Restrictions Restrictions Bolivia 11 0 P P P Colombia 54 0
Slide 6: Business Continuity Update
Business Continuity Update • No impact on operational and financial results through mid March • No disruption to supply chain yet, but taking steps to secure supplies • Network traffic has increased by as much as 40% in some markets in the past week – networks coping well • Shops are showing 30-50%
Slide 7: Business Preparedness
Business Preparedness Business Network Demand Supply Operations Continuity and IT Activate business Continuously update Encourage use of Tigo Define COVID-19 Continuously monitor continuity and crisis inventory planning Money and digital action plan by vertical mobile and fixed traffic management ta
Slide 8: 2. Liquidity and leverage overview
2. Liquidity and leverage overview
Slide 9: We have a diversified portfolio…
We have a diversified portfolio… Latam OCF Currency variations YTD* OCF distribution (%) and OCF ($m)** While Colombia has depreciated sharply, other currencies 2019 have been stable YTD 1.5% Colombia South America 0.0% 0.0% 0.0% 0.1% 0.2% 0.7% 15% 33% -1.7% Bolivia 6% 12% Paraguay 67% -19.9% Nicara
Slide 10: … substantial liquidity…
… substantial liquidity… Currently have access to ~$2 billion in liquidity $0.6b $0.6b $2.0b $1.4b $1.4b Underlying Group Undrawn Revolving Current Available Pending Costa Proforma Cash Balances Q4 19 Credit Facility Liquidity Rica Acquisition Underlying Liquidity 10
Slide 11: … A long debt maturity profile
… A long debt maturity profile Well spread maturities** As of December 31, 2019 ($m) Average life 6.1 years 1,899 Average cost of debt 6.1% 1,101 Proforma liquidity of ~$1.4b is well 883 in excess of upcoming maturities Comcel 659 (GT) 638 544 $800m 548 6.875% 408 29s $750m Panama 25s 26s 28s 6.250%
Slide 12: … and local currency debt in South America
… and local currency debt in South America Higher Fx volatility in South America but more local currency debt USD Local Currency South America 2,617 As of December 31, 2019 Latam Gross Debt 1,073 827 297 502 1,545 350 531 296 206 Colombia Bolivia Paraguay Central America Fx Rate -19.9% 0% -1.7% 0.5%
Slide 13: 3. 2019 Overview
3. 2019 Overview
Slide 14: Strategic development
Strategic development >$3bn portfolio repositioning 1• Acquired Cable Onda 1• Attained #1 position in CAM 2• Acquired Telefonica 2• Added Panama with #1 position Latam Panama, Nicaragua and 3• Fixed and mobile in ALL markets Costa Rica* 4• #1 or #2 position in ALL markets 1• Sold Chad 1• Millicom no
Slide 15: Enhanced liquidity and governance
Enhanced liquidity and governance US Nasdaq Listing 1• Enhanced US presence and liquidity 2• SOX compliance Kinnevik Distribution 3• 100% free float Source: Millicom. 15
Slide 16: Added >4m 4G data customers…
Added >4m 4G data customers… Latam 4G Smartphone Data Customers (‘000) Latam 4G Smartphone Data Penetration* 39% 15,398 31% +34% 10,487 22% 7,230 11% 3,631 2016 2017 2018 2019 2016 2017 2018 2019 4G data users 4G data users from acquisitions Source: Millicom. * Percent of total mobile customers 16
Slide 17: …expanded mobile postpaid subscriber base…
…expanded mobile postpaid subscriber base… Mobile postpaid net adds Improved postpaid growth Subscription revenue 61% Latam organic postpaid subscriber net Latam postpaid organic service revenue Latam subscription revenue as % of service additions (‘000), growth (%), revenue*, 2019 2016 – 2019 2016
Slide 18: …solved for previous spectrum deficiencies
…solved for previous spectrum deficiencies 1• Low and High frequencies in all markets 2• Strong 4G spectrum position achieved in all markets Strong spectrum position in all markets Mhz 165 125 115 95 99 90 68 65 El Salvador Guatemala* Honduras Colombia Paraguay Bolivia Nicaragua Panama High band Low
Slide 19: Added 900k homes passed and 350k customer relationships…
Added 900k homes passed and 350k customer relationships… Improving penetration rates Steadily increasing customer relationships Latam Penetration Rates and HFC Homes Passed (m), Latam HFC Customer Relationships (m), 2016 – 2019 2016 – 2019 HFC Penetration Rate HFC Homes Passed 30.2% 29.4% +350k 29.0
Slide 20: …with subscription continuing to drive growth
…with subscription continuing to drive growth Latam 2019 Organic Service Revenue Growth*, year-on-year 8.4% Latam Service Revenue Organic Growth 2.2% Q1 Q2 Q3 Q4 Prepaid Postpaid 0.0% -0.7% Mobile (B2C) B2B Home • Weaker macro and increased • Comparison against a very • Steady growth in most markets
Slide 21: Our transformation… in cash flow
Our transformation… in cash flow Latam OCF growth Latam OCF ($m) and organic OCF growth, 2018 – 2019 +8.3% 1,442 Sustained healthy network investment • 900,000 Homes Passed Net Adds • 350,000 Customer Relationship Net Adds 17% 17% • 1,800 4G network PoPs* added 2018 2019 OCF Margin 20.5% 24.2% Exclu
Slide 22: Focused on improving free cash flow
Focused on improving free cash flow Equity Free Cash Flow* Equity Free Cash Flow* (m) 2019 Group Equity Free Cash Flow (m) 2014-2019 1 Sustained healthy eFCF generation in 2019 • One-time costs, integration costs, and working capital 326 impacted 2019 306 2 Investing in 2019 and 2020 to structurally
Slide 23: 4. Q4 19 financials
4. Q4 19 financials
Slide 24: Q4 Latam Service Revenue by Country
Q4 19 Latam Service Revenue by Country Service revenue ($m), and YoY organic growth*, Q4 18 – Q4 19 Guatemala (22% of Latam) Honduras (10% of Latam) Panama** (11% of Latam) El Salvador (6% of Latam) +3.7% -0.5% +1.3% -4.4% 317 139 154 87 Q4 18 Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 Colombia (25%
Slide 25: Q4 Latam EBITDA by Country
Q4 19 Latam EBITDA by Country EBITDA($m), and YoY organic growth*, Q4 18 – Q4 19 Guatemala (27% of Latam) Honduras (11% of Latam) Panama** (11% of Latam) El Salvador (6% of Latam) -1.6% +0.8% -9.5% 19.0% +4.0% 185 72 73 40 Q4 18 Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 Q4 18 Q4 19 48.0% 48.9% 50.3% 47.1% 45.5%
Slide 26: Key Financial Metrics – FY 2019
Key Financial Metrics – FY 2019 Latam Service Revenue* Latam EBITDA* Latam OCF Service Revenue ($m) and YoY Growth* EBITDA ($m) and YoY Growth* OCF ($m) and YoY growth 2018 – 2019 2018 – 2019 2018 – 2019 8.8% 17.6% 25.0% 5,514 2,443 1,571 5,069 1,257 2,077 2018 2019 2018 2019 2018 2019 Capex / 17.4%
Slide 27: Net financial obligations evolution
Net financial obligations evolution Year on year evolution – 2019 vs. 2018 Underlying Proportionate Period Leverage* Leverage* Costa Rica YE 2018 2.18x 2.52x acquisition ~$570m** YE 2019 2.76x 3.19x 1,376 160 855 272 87 267 7,236 5,860 4,763 Underlying Underlying Spectrum Dividend M&A FX and Underly
Slide 28: Appendix
tico Appendix Vw
Slide 29: Capital structure
Capital structure Financial obligation profile 31 December 2019 Latam HQ Africa Geography 63% 32% 5% Bonds Banks Leases Source 57% 27% 16% Interest Fixed or Swapped Variable rates* 76% 24% FX Local Hard currency exposure* 37% 63% Less than 5y 5Y or more Maturity* 57% 43% * Excluding Leases 29
Slide 30: Gross debt by country
Gross debt* by country Latin America Africa Corporate Group (underlying) $3,014 $186m $2,773m $5,972m Guatemala: $929m Honduras: $353m (14% local currency) (34% local currency) El Salvador: $268m Nicaragua: $0m (100% local currency) Costa Rica: $148m Colombia $827m (72% local currency) (64% local cu
Slide 31: Gross financial obligations by country
Gross financial obligations* by country Central America South America Africa Corporate Group (underlying) $3,232m $2,190m $408m $2,801m $8,631m 13% guaranteed 2% guaranteed 0% guaranteed 0% guaranteed 5% Guaranteed Of which Leases: $1,376m Guatemala: $1,172m Honduras: $423m (0% guaranteed) (0% guara
Slide 32: Net financial obligations by country
Net financial obligations* by country Central America South America Africa Group (underlying) Corporate $2,878m $1,876m $377m $7,236m $2,105m Leverage: 1.79x Leverage: 1.77x Leverage: 2.89x Leverage: 2.76x Guatemala: $983m Honduras: $383m Leverage: 1.31x Leverage: 1.37x El Salvador: $335m Nicaragua:
Slide 33: Millicom - The Digital Lifestyle
tico MILLICOM THE DIGITAL LIFESTYLE
Millicom International Cellular — Citi Communications Services Conference 2020 on 6ix