Millicom International Cellular S.a. · NASDAQ:TIGO
Millicom International Cellular — Q2 2022 Earnings Presentation
30 slides from Millicom International Cellular's earnings presentation, Jul 28, 2022
Slide 1: Sustained growth momentum in Q2
Sustained growth momentum in Q2 Second Quarter 2022 Mauricio Ramos, CEO Sheldon Bruha, CFO July 28th, 2022 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: Q2 2022 Highlights
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Slide 5: Strategic plans on track
Strategic plans on track Drive OCF1 growth to ~10% - beginning in 2022 Cumulative EFCF1 of $0.8-$1.0bn over next 3 years Advancing TowerCo and Tigo Money Completed rights offering and reduced leverage Science Based Targets validated 1) Group financial information does not include Honduras, which is
Slide 6: Extended track record of growth across business
Drive organic OCF growth to 10% Extended track record of growth across business Growth in all countries Mobile and B2B accelerated Q2 22 local currency service revenue1 growth % Q2 22 Group organic service revenue1 growth % 8.5% 6.9% 7.4% 5.7% 5.6% 4.4% 3.5% 3.6% 2.4% 2.6% 0.9% 1.1% Paraguay Colombi
Slide 7: EBITDA up sequentially
Drive organic OCF growth to 10% 1 EBITDA up sequentially Group EBITDA1 ($m) EBITDA1 margin 4.6% Q2 YoY Organic Growth 577 565 565 564 560 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 40.0% 40.3% 39.0% 40.0% 39.9% 1) Group financial information does not include Honduras, which is not consolidated. Non-IFRS measure.
Slide 8: OCF on target
Drive organic OCF growth to 10% 1 OCF on target EBITDA1 growth and normalized Capex to underpin OCF1 growth in H2 Capex ($m) Capex more front-end loaded in 2022 1,081 ~1,000 681 ~550 Capex normalizing to ~$1b per year 400 454 H1 H2 Full Year On target for acceleration in H2 OCF growth 2021 2022 2022
Slide 9: Colombia progressing strategically
Drive organic OCF growth to 10% Colombia progressing strategically Expanding Home footprint Postpaid strength continues Colombia postpaid customers (‘000) • Wholesale FTTH agreements in Bogotá with ETB and Postpaid customers as a % of total mobile customers Ufinet • Coverage from 37% to 79% of Bogot
Slide 10: B2B growth accelerating
Drive organic OCF growth to 10% B2B growth accelerating B2B inflection continues SMB customers up Digital increasing Group B2B Service Revenue1 organic growth (%) Group SMB B2B Accounts Group B2B digital services organic growth1 (%) 5.7% 9% 13% 4.9% 3.4% 2.2% 2.3% Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21
Slide 11: Significant progress on TowerCo
Unlock hidden shareholder value Significant progress on TowerCo Assets Timing Value Levers Structure Leading Portfolio H1 2022 Tenancy Rationale • Corporate and • Increase tenancy ratio on • Infrastructure play Largest 5th Tower Portfolio governance structure portfolio that has not • Partner for gro
Slide 12: Tigo Money advancing
Unlock hidden shareholder value Tigo Money advancing Tigo Money 2.0 2022 priorities Merchant Platform • Migration from 15 to 1 platform across • Rollout in H2 all countries • Targeting SMBs and super merchants • Pilot ongoing, full rollout in H2 Tigo Money wallet Access card upgrade Merchant Milesto
Slide 13: Advanced our agenda in Latin America
Advanced our agenda in Latin America Environmental Society Governance Fostering development in the region Emissions Reduction Targets Validated Joined the White House Partnership for Central America SBTi approved Millicom carbon emissions reduction targets: • Reduce absolute scope 1 and 2 GHG emissi
Slide 14: Q2 2022 Financial Review
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Slide 15: Group Service Revenue
Allocate capital for return Group Service Revenue1 YoY Organic Service Revenue1 Growth Q2 21 – Q2 22 1,315 4.5% Organic Service Revenue1 Growth 946 Organic +4.5% Q2 21 M&A, FX, Rebased Mobile Fixed Q2 22 and Others Q2 21 1) Non-IFRS measure. Please refer to the non-IFRS disclosures in this presentat
Slide 16: Q2 2022 Service Revenue by Country
Allocate capital for return Q2 2022 Service Revenue by Country1 Service revenue ($m), and YoY local currency growth2 Guatemala (26% of Group) Colombia (25% of Group) Bolivia (12% of Group) Panama (12% of Group) +1.1% +8.5% +2.4% +2.6% 347 336 154 155 Q2 21 Q2 22 Q2 21 Q2 22 Q2 21 Q2 22 Q2 21 Q2 22 P
Slide 17: Group EBITDA
Allocate capital for return Group EBITDA 1 YoY Organic EBITDA1 Growth Q2 21 – Q2 22 4.6% Key Drivers •A Higher programming Organic EBITDA1 costs and bad debt Growth 577 A B B Higher energy, employee costs, and commissions Organic 343 4.6% Q2 21 M&A, FX Rebased Revenue Direct Net Opex Q2 22 EBITDA an
Slide 18: Q2 2022 EBITDA by Country
Allocate capital for return Q2 2022 EBITDA by Country1 EBITDA2 ($m), and YoY local currency growth2 Guatemala (36% of Group) Colombia (17% of Group) Panama (13% of Group) Paraguay (10% of Group) -0.1% +8.2% +8.6% -2.5% +4.0% +15.6% +4.2% 219 106 77 60 Q2 21 Q2 22 Q2 21 Q2 22 Q2 21 Q2 22 Q2 21 Q2 22
Slide 19: Group OCF – 2022 on track for ~10% growth
Allocate capital for return 1 Group OCF – 2022 on track for ~10% growth YoY Organic OCF1 Growth Q2 21 – Q2 22 - 0.7% • A EBITDA growth offset Organic OCF1 by front-end loaded Growth in Q2 capex in H1 2022 322 154 A Organic -0.7% Q2 21 M&A, FX Rebased EBITDA Capex Q2 22 & Others Q2 21 22.3% OCF1 Marg
Slide 20: Successfully completed rights offering
Allocate capital for return Successfully completed rights offering Repaid bridge loan that financed Guatemala acquisition $746m 1 Financed purchase of minority stake in Gross proceeds Panama Reduced leverage by 32 bps sequentially 1) Before deducting underwriting commissions and other offering expen
Slide 21: 100% ownership of Panama
Allocate capital for return 100% ownership of Panama Customers #1 Mobile 2.4m Brand Mobile Customers #1 Fixed 415k HFC / FTTH Customers Financials 46% Margin EBITDA1 27% OCF1 Margin Investment Dollarized Improving Market grade economy industry structure 1) Last twelve-month H1 2022 figures. Please r
Slide 22: Net financial obligations and leverage
Allocate capital for return Net financial obligations and leverage Group financial obligations1 ($m) 1,034 7,118 -730 6,814 62 718 88 6,085 260 275 Net debt1 EFCF Rights Offering Africa Exit Panama FX & Others Net debt1 Leases Net financial 31-Dec-21 After Africa Minority 30-Jun-22 obligations1 30-J
Slide 23: Wrap up
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Slide 24: On track to deliver on Investor Day commitments
On track to deliver on Investor Day commitments OCF1 growth of ~10% p.a. – beginning in 2022 Cumulative EFCF1 of $0.8-$1.0bn over next three years Prioritize capital allocation to leverage reduction Unlock value with TowerCo & Tigo Money carveouts Ambitious ESG targets 1) Non-IFRS measure. Please re
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Slide 26: Group Financial Highlights – Q2 2022
Group Financial Highlights – Q2 2022 Group Consolidated Financial Statements1 Selected P&L data Key Observations $ million Q2 22 Q2 21 % Var Revenue 1,447 A 1,001 44.6% •A Consolidation of Guatemala operations Cost of sales (395) (285) (38.5)% Operating expenses (475) (373) (27.4)% •B Revaluation of
Slide 27: Debt Maturity Schedule
Debt Maturity Schedule Q2 22 Average maturity 6.0 Years Average cost of debt 5.8% Telecel $550m 5.875% Comcel $900m 31s 5.125% 29s $808m $675m Cable 4.500% 6.250% Onda $600m 28s 4.500% $450m 5.125% SEK SEK 2bn 26s 2.15bn 4.913%1 $148m 3.643%1 6.625% 27 1) Fully swapped rate
Slide 28: Capital Structure
Capital Structure Financial obligation profile As of June 30, 2022 Latam HQ 67% 33% Bonds Banks Leases 65% 22% 13% Fixed or Swapped Variable 85% 15% Local Other 41% 59% Less than 5Y 5Y or more 29% 71% • Excluding Leases. El Salvador's official unit of currency is the U.S. dollar, while Panama uses t
Slide 29: Financial obligations by country
1 Financial obligations by country Guatemala Honduras: Gross: $1,690m Gross: $335m Net: $1,572m Net: $317m Nicaragua: Leverage: 1.83x Leverage: 1.25x Gross: $125m Group Net: $109m Gross: $7,897m El Salvador: Leverage: 1.04x Gross: $200m Net: $7,118m Net: $186m Of which Leases: Leverage: 1.10x Colomb
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