Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q1 2016 Earnings Presentation
30 slides from Millicom International Cellular's earnings presentation, Apr 26, 2016
Slide 1: 2016 Q1 results
2016 Q1 results Mauricio Ramos, CEO Tim Pennington, CFO 26th April 2016
Slide 2: Disclaimer
Disclaimer This presentation may contain certain “forward-looking statements” with respect to Millicom’s expectations and plans, strategy, management’s objectives, future performance, costs, revenue, earnings and other trend information. It is important to note that Millicom’s actual results in the
Slide 3: CEO review
CEO review Mauricio Ramos, 26th April 2016
Slide 4: Key Messages
Key Messages 1 We confirm 2016 full year outlook: Q1 is on track 2 Continued strategic rebalancing of our revenue mix 3 Focused strategy execution Page 4
Slide 5: 2016 – Q1 results
1 2016 – Q1 results Q1 on track with 2016 full year guidance Organic growth Guidance Service revenue 1,435 US$ million +4.1% Mid-single digit Adjusted EBITDA 550 US$ million +7.0% Mid to high-single digit Page 5
Slide 6: Revenue mix rebalancing to higher growth
2 Revenue mix rebalancing to higher growth Service revenue mix evolving towards higher growth opportunities Revenue mix 2016 Q1 Q1 Growth Latam Voice & sms 31.7% -12.8% Monetize mobile data 19.5% Latam Mobile data 28.6% Build cable in Latam 25.8% Cable growth 11.0% Africa 15.1% 12.1% Service revenue
Slide 7: Monetizing data
2 Monetizing data Data monetization strategy paying off Smartphone users Data usage Thousands GB/user/month 1 14,321 Q1 15 +6,851 21,171 Q1 16 29.8% YoY mobile data growth Data ARPU 0.85 Q1 15 2 +23.0% 1.04 Q1 16 US$ constant FX 5.21 Q1 15 3 +11.2% 5.80 Q1 16 Page 7
Slide 8: Building cable
2 Building cable Cable: building the network continues Total Homes Passed, Legacy access Increase in HFC Homes Passed Thousands HFC Q1 15 to Q1 16 Thousands 7,632 7,715 7,499 7,169 7,256 1,258 1,209 1,322 1,410 1,384 +175k CAM +383k Colombia 6,177 6,375 6,506 5,758 5,873 +96k Bolivia Q1 15 Q2 15 Q3
Slide 9: Diversified portfolio of countries
2 Diversified portfolio of countries Our Latam portfolio is well balanced in size and contribution 1 Top 6 = 83.1% 2 Diversified Top 6 Mix of proportionate EBITDA generation Top 6 relative contribution Q1 2016 Q1 2016 Before corporate costs % of the 83.1% Honduras Bolivia Colombia 83.1% Guatemala Pa
Slide 10: Operational strategy execution progressing
3 Operational strategy execution progressing Our operational strategy execution is progressing Colombia, Launch of DTH Q1 2016, YoY growth in LC 8.8% 2.3% 1.4% -0.4% Tigo (Mobile) UNE (Home) UNE (B2B) TigoUNE (Service) Paraguay Launch of 4G Q1 2016, YoY growth in LC 21.2% 15.3% 7.1% 3.5% -11.7% Mobi
Slide 11: Operational strategy execution progressing
3 Operational strategy execution progressing Our operational strategy execution is progressing Bolivia, Offer simplification from 147 to 6 plans available in Mobile, convergence Q1 2016, YoY growth in LC in Home 39.2% 31.6% 24.8% 5.5% 1.9% Mobile Home Fixed B2B MFS Service revenue Central American c
Slide 12: Operational strategy execution progressing
2 Operational strategy execution progressing Our operational strategy execution is progressing App by app Smart pricing Prepaid in app upselling Watch content anytime, anywhere Page 12
Slide 13: Conclusion
Conclusion Simplified and focused strategic execution Rebalancing towards higher growth business segments On track on Full Year outlook Disciplined capital allocation Page 13
Slide 14: Financial review
Financial review Tim Pennington 26 April 2016
Slide 15: Key Messages
Key Messages 1 Solid organic revenue growth 2 Strong margin improvement 3 Improved capital structure Page 15
Slide 16: Revenue by region
Revenue by region Solid organic growth Revenue evolution by Region Q1 organic growth 2.1% US$ million, Q1 2015 – Q1 2016 +2.1% -8.5% 14 25 0 • Latam: Paraguay rebound 10 (190) • Africa growth remains robust at +11.9% 1,704 1,670 • Adverse FX impact, reported revenue down 8.5% 1,528 Q1 15 LatAm Afric
Slide 17: Service revenue
Service revenue Service revenue growth mid-single digit Quarterly group organic service revenue growth Q1 15 – Q1 16 5.7% -0.3% -0.3% -1.0% Mobile 0.1% Cable -1.1% 4.1% 5.4% 5.5% 5.7% 5.1% 4.1% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q4 15 ex DRC Latam ex Africa Colombia Q1 16 Colombia Page 17
Slide 18: EBITDA
EBITDA EBITDA improvements driven by efficiency EBITDA evolution by Region Adjusted EBITDA +7.0% organic US$ million, Q1 2015 – Q1 2016 +7.0% • Latam +2.8% 611 17 2 • Outperformance from Colombia, 7 Bolivia, Paraguay 571 16 62 • El Salvador decline due to topline pressure 550 • Africa +12.3% • Corpo
Slide 19: EBITDA margin
EBITDA margin Positive contributions at all levels Adjusted EBITDA margin In % Adjusted EBITDA +1.8 percentage points +1.8 • Latam contribution 0.7 ppts (Bolivia, 36.0 35.9 0.1 Colombia) 0.8 0.2 • Africa contributing 0.2 ppts (Ghana and 0.7 Senegal offsetting Tanzania) 34.2 • Opex down 11.1% year-on
Slide 20: P&L review
P&L review Adjusted net profits down on higher taxes US$ million Q1 16 Q1 15 % Var •A D&A reducing by 8% on currency devaluation Revenue 1,528 1,670 (8) Adjusted EBITDA 550 571 (4) D&A (303) A (330) (8) •B Others includes $30 million of FX gains Operating profit 239 235 2 Net Finance Charge (107) (1
Slide 21: Q1 cash flow
Q1 cash flow Capex catch-up from Q4 Q1 Cash flow US$ million • High level of cash capex as catch-up 550 542 from Q4 8 343 • Working capital outflow in line with Q1 last year 123 76 38 • Tax paid $12 million lower year-on- 92 year thanks to Colombia refund arising 14 from overpayments -54 -68 Adjuste
Slide 22: Net debt
Net debt Pro forma for DRC, net debt lower Net debt evolution US$ million, 31 December 2015 – 31 March 2016 • Proceeds from DRC received 49 30 23 • Refinancing of the SEK bond on 68 improved terms (20bps lower) • Spectrum: final payment ($30 million) 4,419 4,295 for LTE in Paraguay • Net debt / LTM
Slide 23: Debt profile
Debt profile Long average maturity to debt profile Debt maturity profile post recent refinancinga Average life of 5.8 years US$ million 903 868 844 793 563 375 276 241 167 123 2016 2017 2018 2019 2020 2021 2022 2023 2024 >2024 a) excluding financial leases Page 23
Slide 24: Cash flow model
Cash flow model Impact of DRC disposal on operating leverage metrics FY 15 Group FY 15 Group Long Term with DRC without DRC targets 7.4% 7.1% High single Revenue growth (constant FX) digit Operating leverage 45.6% 47.5% ~50% EBITDA Margin (*) trending up towards 33.7% 34.4% ~35% Capex to Sales trend
Slide 25: 2016 Outlook
2016 Outlook Our cash flow model will keep improving in 2016 Service revenue to grow mid single digit (a) Adjusted EBITDA to grow mid to high single digit (b) Group CAPEX between $1.15 and $1.25 billion (c) Our 2016 outlook is in constant currency, at constant perimeter (with our JV in Guatema
Slide 26: Q&A
Q&A We believe in better. We believe in ticd
Slide 27: Appendix
Appendix We believe in better. We believe in ticd
Slide 28: Appendix – Below EBITDA
Appendix – Below EBITDA Depreciation and amortisation Interest 12 14 2 41 330 117 303 107 D&A Q1 15 Underlying FX D&A Q1 16 Interest Q1 15 Underlying FX Interest Q1 16 Tax 4 27 62 39 Tax Q1 15 Underlying FX Tax Q1 16 Page 28
Slide 29: Gross debt by country
Gross debt by country Central America: South America: Africa: Corporate: Total MIC Debt a Total debt $1,473m Total debt $1,378m Total debt $535m Total debt $2,015m $5,402m Honduras: $383m Senegal: $17m Guatemala: $982m Chad: $114m El Salvador: $7m Ghana: $61m Costa Rica: $101m Rwanda: $131m Colombia
Slide 30: Currency exposure of the debt
Currency exposure of the debt Mar-16 Debt including finance leases Cash Net debt US$ Local Total Total US$ Local Total 1,479 1,372 2,851 471 1,295 1,085 2,380 Latin America 52% 48% 100% 54% 46% 100% 307 228 535 220 280 35 315 Africa 57% 43% 100% 89% 11% 100% 2,015 0 2,015 292 1,723 0 1,723 Corporate
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