Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Non-Deal Roadshow (June 2019)
31 slides from Millicom International Cellular's roadshow presentation, Jun 30, 2019
Slide 1: Building the Tigo of the future
Building the Tigo of the future Presentation as of June 30, 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 Building the Tigo of the future 1 Millicom at a Glance 2 Investment Highlights 3 Q2 Highlights and Outlook 4 Appendix 4
Slide 5: 1. Millicom at a Glance
1. Millicom at a Glance 5
Slide 6: Millicom at a glance
Millicom-at-a-glance Leader in Nine Latam Markets Strong KPIs Guatemala Honduras Mobile business #1 of 2 in Mobile #1 of 3 in Mobile #2 of 2 in Broadband #1 of 3 in Broadband • 37.2 million subscribers #1 of 2 in PayTv #2 of 3 in PayTv • 11.9 million 4G subscribers, +35% yoy El Salvador Nicaragua #2
Slide 7: 2. Investment Highlights
2. Investment Highlights 7
Slide 8: Investment Highlights
Investment Highlights 1 Growing Economies with Low Broadband Penetration Rates 2 State-of-the-art 4G & HFC Cable Networks 3 Increasing Profitability & Cash Flow Generation 4 Clearly Defined Financial Strategy to Support Future Growth & Market Leadership 5 Strong Corporate Governance 8
Slide 9: We are in growing Latam markets…
1 We are in growing Latam markets… Latin American markets are growing and remain underpenetrated, representing an attractive opportunity Penetration Potential GDP Growth Population Growth CAGR % GDP growth, 2018-2024 CAGR % population growth, 2018-2024 Growing economies with 5.3% 2.0% stable macroec
Slide 10: … with low broadband penetration rates
1 … with low broadband penetration rates Markets in Latin America remain underpenetrated, representing an attractive opportunity Penetration Potential Country Fixed Broadband Penetration (2018) 4G Penetration (2018) Growing economies Bolivia 9% 1st 37% with stable macroeconomic environment Hondura
Slide 11: We are building state-of-the-art 4G & HFC cable networks in Latam
2 We are building state-of-the-art 4G & HFC cable networks in Latam… 1 Monetize Data – Mobile Customer Evolution Expand 4G coverage and Figures in 000s capacity LatAm 4G Coverage LatAm 4G Customers(1) Increase 4G/LTE 11% 32% penetration 2.0x Wireless 3.0x Accelerate postpaid 67% migration 33%
Slide 12: …with Latam capex increasingly variable in nature
2 …with Latam capex increasingly variable in nature 2016 2017 2018 LTM Capex / 16.2% 16.7% 17.4% 17.5% Salesa Points of Presence 2,900 2,200 2,600 2,200 Expansion Net additions Network HFC Homes Passed 0.8 1.3 1.3 1.1 net additions (m)b 4G Users 2.7 3.6 3.3 3.6 net additions (m)b Acquisition Custome
Slide 13: Increasing Profitability & Cash Flow Generation
Increasing Profitability & Cash Flow 3 than Offsetting FX Headwinds in LatamGeneration More Positive Organic Growth since 2017… …Supporting Increasing EBITDA Margins(2)… (US$mm) CAGR ‘16 – LTM 2Q19: +2.0% (US$mm) CAGR ‘16 – LTM 2Q19: +4.2% -0.2% +0.9% +4.3% +3.4%(1) -2.2% +2.8% +3.5% +3.3%(1) $2,144
Slide 14: Clearly Defined Financial Strategy to Support Growth
4 Clearly Defined Financial Strategy to Support Growth Organic growth and cash flow generation have provided strategic optionality for the Company 1 Organic Growth & Free Cash Flow Generation 2 Capital Allocation Discipline Tigo DRC Disposal 1Q16 Divest underperforming businesses in Expansion of
Slide 15: Strong Corporate Governance
5 Strong Corporate Governance Management Team Strong Corporate Governance Standards & Practices Majority of executive team has been working together since 2015 Independent Board of Management not Present in Directors Board of Directors Strong focus on 7 out of 8 directors are No executives or of
Slide 16: Investment Highlights – Latam in summary
Investment Highlights – Latam in summary HSD Networks Users Revenue EBITDA Cash Flow 4G Coverage 4G Customers Service Revenue EBITDA margin OCF organic growth (%) 1 (mm) organic growth (%) 1 (%) 2 1.4x 3.4x 2.2pp 2.5pp 67% 11.9 49% 3.5 2016 Q2 19 2016 Q2 19 6.5pp HFC HP HFC Customer (mm) Relationshi
Slide 17: 3. Q2 Highlights and Outlook
3. Q2 Highlights and Outlook 17
Slide 18: Strong net additions in Q2 2019
Strong net additions in Q2 2019 Latam KPIs* Points of Presence 4G Users Postpaid Subscribers Mobile +450 +538,000 +60,000 HFC Homes Passed HFC Customers HFC RGUs Cable +235,000 +94,000 +216,000 * Adjusted to exclude one-time increases from acquisitions. 18
Slide 19: Latam segment key financial metrics – Q2 2019
Latam segment key financial metrics – Q2 2019 Service Revenuea EBITDAa and Margins Q2 OCF and Marginsb $m and % organic growth, Q2 18 – Q2 19 $m and % organic growth, Q2 18 – Q2 19 $m and % organic growth, Q2 17 – Q2 18 2.0% 1.5% 6.4% 1,358 584 360 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 37.1% 40.0% 22.
Slide 20: Latam service revenue by country
Latam service revenue by country Service revenue ($m), and YoY organic growth*, Q2 18 – Q2 19 Guatemala (23% of Latam) Honduras (10% of Latam) Panama (7% of Latam) El Salvador (6% of Latam) +7.6% +2.4% -0.7% -7.6% 310 138 99 87 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 Colombia (26% of Latam)
Slide 21: Latam EBITDA by country
Latam EBITDA by country EBITDA($m), and YoY organic growth*, Q2 18 – Q2 19 Guatemala (30% of Latam) Honduras (11% of Latam) Panama (8% of Latam) El Salvador (5% of Latam) +6.8% +12.5% +3.8% -14.4% 188 70 47 30 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 Q2 18 Q2 19 41.2% 47.1% 44.7% 30.7% 30.9% 50.6% 53.0%
Slide 22: Cable Onda is tracking ahead of expectations…
Cable Onda is tracking ahead of expectations… EBITDAa EBITDA-Capex (OCF) a $ million $ million % revenue % revenue 29 60 47 91 31 44 Q1 19 Q2 19 H1 19 Q1 19 Q2 19 H1 19 44.6% 47.1% 45.9% 31.5% 29.1% 30.3% Strong EBITDA and synergies driving ~10% upside to OCFb a) EBITDA and OCF are non-IFRS measures
Slide 23: We confirm our 2019 outlook
We confirm our 2019 outlook Year-to- Outlook Medium- Latam segment date 2019 term Service revenue* 2.8% 3-5% Mid-single- digit *Organic growth EBITDA* Mid-to-high 3.0% 4-6% *Organic growth single-digit OCF (EBITDA Mid-to-high less capex)* 6.9% Around 10% *Organic growth single-digit Slightly above C
Slide 24: 4. Appendix
4. Appendix 24
Slide 25: Latam segment reconciliations
Latam segment reconciliations Group revenue to Latam service revenue bridge, Q2 19 1,553 92 1,461 103 1,358 499 1,054 Revenue Guatemala Underlying Africa Latam Telephone and Latam service and Honduras revenue revenue revenue equipment revenue Group operating profit to Latam EBITDA* bridge, Q2 19 584
Slide 26: Net Debt evolution
Net Debt evolution Underlying Net debt evolution $ million, December 31, 2018 – June 30, 2019 919 10 344 46 11 133 6,487 5,116 5,568 Underlying Underlying Spectrum Dividend M&A FX and Underlying net Impact of Underlying Net debt* Equity others debt* Q2 2019 IFRS 16 Net debt* YE 2018 FCF* excl. IFRS
Slide 27: Capital structure
Capital structure Debt profile 30 June 2019 Latam HQ Africa Geography 61% 35% 4% Fin. Bonds Banks Source Leases 56% 27% 17% Interest Fixed or Swapped Variable rates 81% 19% FX Local USD and SEK exposure* 29% 71% Less than 5y 5Y or more Maturity* 26% 74% * Excluding Finance Leases 27
Slide 28: Debt profile
Debt profile Well spread debt profile Debt maturity profile $ million Average life of 5.6 years* 1,312 967 868 GT 600 $800m 534 449 SEK 415 347 $2bn 29s 313 $750m 271 265 25s 26s 28s $500m $500m $500m PY $300m 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 >2029 International Bonds Local Bonds (C
Slide 29: Gross debt by country
Gross debt* by country Central America: South America: Africa: Corporate: Total MIC Debt: Total debt $2,533m Total debt $2,147m Total debt $293m Total debt $2,638m $7,612m 21% guaranteed 3% guaranteed 23% guaranteed 0% guaranteed 9% Guaranteed Guatemala: $1,181m (0% guaranteed) Honduras: $450m (28%
Slide 30: Net debt by country
Net debt* by country Central America: South America: Africa: Total MIC : Corporate: $1,658m $1,614m $143m $5,568m $2,153m Leverage: 1.18x Leverage: 1.58x Leverage: 1.49x Leverage: 2.43x Guatemala: $661m Leverage: 0.95x Honduras: $359m Leverage: 1.31x El Salvador: $270m Leverage: 2.22x Nicaragua: $(1
Slide 31: Millicom - The Digital Lifestyle
tico MILLICOM THE DIGITAL LIFESTYLE
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